UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
☑ | Filed by the Registrant | ☐ | Filed by a Party other than the Registrant |
CHECK THE APPROPRIATE BOX: | ||
☐ | Preliminary Proxy Statement | |
☐ | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☑ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Under Rule 14a-12 |
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): | |||
☑ | No fee required. | ||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
1) Title of each class of securities to which transaction applies: | |||
2) Aggregate number of securities to which transaction applies: | |||
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
4) Proposed maximum aggregate value of transaction: | |||
5) Total fee paid: | |||
☐ | Fee paid previously with preliminary materials: | ||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | ||
1) Amount previously paid: | |||
2) Form, Schedule or Registration Statement No.: | |||
3) Filing Party: | |||
4) Date Filed: |
Proxy Statement
20192020
Annual Meeting
of Shareholders
May 20, 2019June 9, 2020 at 10:00 a.m. Eastern Daylight Time
C SpaceICON International290 CongressOne East Weaver Street 7thFloorBoston, MA 02210Greenwich, CT 06831
Shareholders may also attend online at
www.virtualshareholdermeeting.com/OMC2020
A Letter from Omnicom’s Lead Independent Director
To My Fellow Shareholders:
It is a great honorI would like to serve as Omnicom’s Lead Independent Director.start by acknowledging the difficult times that our society, shareholders, clients, and the Omnicom family are facing due to the COVID-19 pandemic. During this period, we have been focused first and foremost on ensuring the safety and well-being of our people, while continuing to support our clients and protect our business. Our Board is focused on the oversight of Omnicom’sand management team have been actively monitoring and protecting your interests. We believe that a commitmentresponding to the highest standards of corporate governance drives successCOVID-19 pandemic, and builds sustainable, long-term value for shareholders.
2018 was a successful year for Omnicomwhile it is too early to understand its full impact on our operations and financial performance, we are confident that we have the right resources in many regards.place to weather these challenging times. I encourage you to read the annual letter to shareholders from John Wren, our Chairman and Chief Executive Officer, whichJohn Wren, that addresses the steps we have taken in response to COVID-19. The letter is available on Omnicom’sour website at http://investor.omnicomgroup.com, to learn more about the progressinvestor.omnicomgroup.com.
In light of public health considerations, we have madedecided to hold a “hybrid” Annual Meeting of Shareholders this year so that shareholders have the opportunity to attend the Annual Meeting online via live audio webcast at www.virtualshareholdermeeting.com/OMC2020. Additional details on achievinghow to participate are included in the Proxy Statement.
2019 In Review:
Our focus and priorities have largely shifted in recent weeks due to the ongoing COVID-19 pandemic. We are fortunate that after several years of Board refreshment, our strategic objectives overBoard and management team have strengthened Omnicom’s governance. The diversity of perspectives and range of skill sets that we now have will serve us well as we respond to the past year.current crisis and will be key to the effective oversight of Omnicom’s long-term strategy. Moving forward, we will continue to adhere to solid corporate governance standards that support the company’s value-creation strategy.
Ongoing Dialogue with Shareholders Through ProactiveLong-Standing Shareholder Engagement Program Remains a Priority.
EngagingMaintaining an open dialogue through engagement with our shareholders remains one of our top priorities and is a focuspriority for the entire Board. I have had the pleasure of speaking with many of our largest shareholders about a variety of matters, including board leadership and composition, succession planning, corporate culture, executive compensation, sustainability, and diversity and inclusion. This past year, and in each of the previous three years, we reached out to shareholders holding more than 60%68% of our outstanding shares and we spoke to every shareholder who accepted our invitation for engagement. The constructiveIn these conversations, we discussed a variety of topics including board leadership and composition, the alignment of director skills with Omnicom’s strategy, succession planning, diversity and inclusion, corporate culture, executive compensation, and sustainability. We value the feedback we receive from shareholdersreceived during these engagements, which is shared with and discussed by the full Board on a regular basis. We strive to maintain an open dialogue with our shareholdersbasis, and their views are factoredwe factor this shareholder input into our evolving governance practices.
Special Meeting Right Revised in 2018 in Response to Shareholder Feedback
Our Board amended Omnicom’s By-laws in December 2018is Highly Engaged, Possesses a Wide Range of Skills and Experiences, and Continues to reduce the ownership threshold required for shareholders to call a special meeting from 25% to 10%. This was done in response to a shareholder proposal that received 50.3% support at our 2018 annual meeting and after taking into account input from subsequent discussions with our investors, including those who had not supported the proposal.
Thoughtful Approach to Board Composition with a Demonstrated Commitment to RefreshmentFocus on Refreshment.
The Board has made tremendous progress on its refreshment initiative, which has been underway since 2015. We have been focused on ensuring that ourOmnicom’s Board is representativecomprised of allhighly skilled directors with the collective experience and perspectives that together generate strong and effective oversight. This balanced and diverse mix of directors serving on Omnicom’s Board is a result of our constituencies –ongoing refreshment efforts. Two long-serving directors will not be standing for re-election at this year’s Annual Meeting due to our clients, employees and shareholders, and that through regular evaluationdirector retirement policy. As a result, we again conducted a formal analysis of director skill sets, and believe that we continue to have the optimal combination of expertise is represented on the Board. The result is a highly talented and diverse groupmix of directors in place to align with Omnicom’s key strategic priorities and critical areas of oversight, including strategic planning, industry experience, finance and accounting, risk management and controls, talent management, and technology.
Our Commitment to Diversity and Inclusion Drives Progress across the skills, backgrounds and experiences best suited to achieve our strategic objectives. ThroughOrganization.The strength of our commitment we have reduced our average board tenure by approximately 33% since 2015, sixto fostering a culture of diversity and inclusion at every level of our independentorganization is demonstrated by the diversity on our Board. At the Board level, a majority of our directors are female, and four directors are African American. In addition, a majority of the AuditAmerican, and Compensation Committees and one half of the Governance Committee are comprised of female directors, with female directors Chairing both the Audit and Compensation Committees.
Leadership Structure that Reflects Our Current Business and Industry Circumstances
The Board regularly evaluates the leadership structure at Omnicom and believes this evaluation should be considered in the context of Omnicom’s specific circumstances, business and culture, while giving appropriate weight to the unique challenges facing a professional services company such as ours. In May 2018, the Board determined, after assessing various options, to appoint our CEO John Wren as Chairman following the retirementthree of our then Executive Chairman, Bruce Crawford. In making this decision, the Board considered:
Pay Decisions and Outcomes Aligned to Performance
In determining compensation for our named executive officers, we continue to demonstrate our commitment to closely link executive compensation to performance by making a significant portion of potential compensation variable and long-term performance driven. This ensures alignment between executives’ and shareholders’ interests and incentivizes long-term value creation for the Company.
The Board remains focused on our oversight responsibilities and will continue to communicate our efforts to shareholders. We believe the diversity of our Board, together with the many ongoing initiatives across our organization and the progress we have made on diversity throughout Omnicom, reflects the fact that regular, transparent communication withdiversity and inclusion are core Omnicom values and essential components of our shareholders is criticalculture. A diverse workforce supports the success of our business as it creates a robust mix of viewpoints and ideas that enhance our ability to deliver superior services to our long-term success.clients.
I have shared with you before that it is a privilege to serve as Omnicom’s Lead Independent Director, and that sentiment holds true today. On behalf of the entire Board, I thank you for your support and look forward to continuing a constructive dialogue in the years to come.work with our management team to navigate present challenges and create sustainable, long-term value for you, our shareholders.
Leonard S. Coleman, Jr.
Lead Independent Director
Subject:
1. | Elect the directors named in the Proxy Statement accompanying this notice to the Company’s Board of Directors to serve until the Company’s |
2. | Vote on an advisory resolution to approve executive compensation. |
3. | Ratify the appointment of KPMG LLP as our independent auditors for the fiscal year ending December 31, |
4. | Vote on the shareholder proposal described in the accompanying Proxy Statement, if properly presented at the |
The Board unanimously recommends that you vote:
■ | FOReach of the director nominees; |
■ | FORthe advisory resolution to approve executive compensation; |
■ | FORthe ratification of the appointment of KPMG LLP as our |
■ | AGAINSTthe shareholder proposal described in the |
Shareholders will also transact any other business that is properly presented at the meeting. At this time, we know of no other matters that will be presented.
In accordance with the rules promulgated by the U.S. Securities and Exchange Commission, we sent a Notice of Internet Availability of Proxy Materials on or about April 10, 2019,29, 2020, and provided access to our proxy materials on the Internet, beginning on April 10, 2019,29, 2020, to the holders of record and beneficial owners of our common stock as of the close of business on the record date.
Please sign and return your proxy card or vote by telephone or Internet (instructions are on your proxy card), so that your shares will be represented at the 20192020 Annual Meeting of Shareholders, whether or not you plan to attend. For your convenience, you may attend the meeting in person or online through a live audio webcast of the meeting. If you do attend in person, you will be asked to present valid photo identification, such as a driver’s license or passport, before being admitted. Cameras, recording devices and other electronic devices will not be permittedpermitted.
You may also attend the 2020 Annual Meeting online by visiting www.virtualshareholdermeeting.com/OMC2020 and entering the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or proxy card. Shareholders of record that hold shares directly in their own name through our transfer agent, Equiniti Trust Company, or through an Omnicom employee plan, must pre-register to attend the 2020 Annual Meeting online at www.proxypush.com/OMC prior to the meeting.deadline of Tuesday, June 2, 2020 at 5:00 p.m. Eastern Daylight Time. Additional information about the meeting is included below in this Proxy Statement in the section entitled “Information About Voting and the Meeting.”
Michael J. O’Brien
Secretary
New York, New York
April 10, 2019
Meeting Date: |
Time: |
Place: Shareholders may also |
Record Date: |
This summary highlights selected information about the items to be voted on at the 20192020 Annual Meeting of Shareholders. This summary does not contain all of the information that you should consider in deciding how to vote. You should read the entire Proxy Statement carefully before voting.
Meeting Agenda and Voting Recommendations
ITEM 1: | Election of Directors |
The Board recommends a voteFOReach of the director nominees. ■We have conducted a comprehensive evaluation of director skill sets to ensure that each director's unique qualifications and attributes collectively support the oversight of Omnicom's management. ■Diversity is a core value at every level of our organization. A majority of our director nominees are female and four are African American. ■ ■Each of our directors is elected annually by a majority of votes cast. | See page for further information | |
DIRECTOR NOMINEES |
Name and Age | Principal Occupation | Director Since | Omnicom Committees | Other Current Public Company Boards | ||||
Mary C. Choksi, (I), | Former Founding Partner and Senior Manager of Strategic Investment Group | 2011 | A(Chair) C | ■Avis Budget Group ■White Mountains Insurance Group, Ltd. | ||||
Lead Independent Director | Former | 1993 | C G | ■Avis Budget Group ■Electronic Arts Inc. ■Hess Corporation | ||||
Susan S. Denison, (I), | Former Partner, Cook Associates | 1997 | C(Chair) G | |||||
Ronnie S. Hawkins, (I), | Managing Director of Global Infrastructure Partners | 2018 | G F | |||||
Deborah J. Kissire, (I), | Former Vice Chair and Regional Managing Partner, EY | 2016 | A F | ■Cable One, Inc. ■Axalta Coating Systems Ltd. | ||||
Gracia C. Martore, (I), | Former President and Chief Executive Officer, TEGNA Inc. | 2017 | A | ■WestRock Company ■United Rentals, Inc. | ||||
Linda Johnson Rice, (I), | 2000 | C G | ■ | |||||
Valerie M. Williams, (I), | Former Southwest Assurance Managing Partner, EY | 2016 | A F | ■WPX Energy, Inc. ■DTE Energy Co. | ||||
John D. Wren, | Chairman and Chief Executive Officer, Omnicom | 1993 |
(I):Independent | A:Audit | C:Compensation | F:Finance | G:Governance |
PROXY SUMMARY
Board Snapshot
Independence | Diversity | ||
8 of 9are independent | Women & Multicultural Directors | ||
Current Tenure of | Experience and Skills | ||
Our director nominees are accomplished leaders who bring a mix of experiences and skills to the Board. | |||
Our Board has identified skill categories fundamental to its ability to effectively oversee Omnicom's strategy and management, and undertakes a comprehensive evaluation to ensure these skills are well represented on the Board. | |||
See page |
GOVERNANCE HIGHLIGHTS |
The Board has adopted, and periodically reviews, policies and procedures to guide it in its oversight responsibilities. These policies and procedures provide a framework for the proper operation of our Company and align with shareholders' interests.
Shareholder Rights | Independent Oversight | Good Governance | |||
PROXY SUMMARY
SHAREHOLDER ENGAGEMENT |
Ongoing shareholder engagement is a priority for our Board and management team. In 2018,2019, we reached out to shareholders holding more than 60%68% of our outstanding shares and engaged withspoke to shareholders representing more than 40%25% of outstanding shares.shares, which was every shareholder who accepted our invitation for engagement. As in prior years, Mr. Coleman, our Lead Independent Director, actively participatedwas an active participant in select shareholder engagement with approximately 10% of outstanding shares.meetings. Broad topics discussed included:
■ | Company strategy and performance |
■ | Board composition, refreshment and leadership |
■ | Management succession |
■ | Executive compensation program |
■ | Diversity and inclusion efforts across the organization |
■ | Governance practices |
■ | Sustainability initiatives |
Below isWe have made a summarynumber of topics discussedchanges in recent years in response to the feedback we have received from our ongoing shareholder meetings along with the actions taken by our Board:engagement efforts, including:
Topics discussed with Shareholders | Recent Board actions in response to feedback | |
Board Leadership– A large majority of our shareholders indicated they are supportive of the combined Chair and CEO positions given our strong Lead Independent Director role, the critical nature of client-chairman relationships in our professional services business, and the complex nature of our rapidly changing industry | ■The role and responsibilities of our Lead Independent Director, which were most recently enhanced in February 2019, are robust and clearly defined ■Based on shareholder feedback, ■The Board continues to evaluate its leadership structure on an ongoing basis to ensure its structure is in | |
Board Refreshment– Shareholders are pleased with the level of progress we have shown to meaningfully refresh and further diversify our Board | ■The Board has implemented a thoughtful approach to refreshment, including adoption of a mandatory retirement policy, which fostered a smooth transition ■ ■Two directors will not stand for re-election at the 2020 Annual Meeting and therefore are not included in this Proxy Statement ■The Board anticipates continued Board refreshment | |
Director Skill Sets– Shareholders support the | ■The Board continues its search for qualified director candidates, | |
■ ■The Board |
We appreciate the insights and perspectives of our shareholders, which were discussed among the full Board and factored into its decision making process for the year.Board.
PROXY SUMMARY
ITEM 2: | Advisory Resolution to Approve Executive Compensation |
The Board recommends a voteFORthis voting item. ■We closely tie pay to current and long-term Company performance; ■We maintain a high degree of variable, “at-risk” compensation; ■We establish challenging performance metrics that align with our business strategy; and ■We sustain competitive compensation levels. | See page for further information | |
EXECUTIVE COMPENSATION HIGHLIGHTS |
Omnicom strives to closely link executive compensation to performance by making a significant portion of potential compensation variable, or “at-risk”, as well as long-term performance driven. In 2018,2019, we compensated our named executivesCEO using the following elements for total target direct compensation.
Description | ||||||||
Base Salary | Fixed amount based on responsibilities, experiences and market data. |
| ||||||
Annual Cash Incentive | Awards are earned based on goals that are meaningful and challenging, and designed to drive shareholder value. | |||||||
| ||||||||
Performance Restricted Stock Units | ||||||||
| The Incentive Award, based on quantitative performance measures, is allocated between short-term cash and long-term |
| ||||||
Compensation Best Practices | |
Emphasis on performance-based compensation | |
Executive and director stock ownership guidelines (6x base salary for CEO; 3x base salary for CFO) | |
Policy adopting equity grant best practices | |
Compensation forfeiture/clawback policy | |
Policy prohibiting hedging of company equity securities | |
Policy prohibiting pledging and margin transactions |
PROXY SUMMARY
ITEM 3: | Ratify the appointment of KPMG LLP as our independent auditors for the fiscal year ending December 31, |
The Board recommends a voteFORthis voting item. | See page for further information | |
ITEM 4: | Shareholder Proposal |
The Board recommends a voteAGAINSTthis voting item. | See page for further information | |
ITEM 1 –— ELECTION OF DIRECTORS
______________
The Board of Directors of Omnicom Group Inc., a New York corporation (“Omnicom,” the “Company,” “we,” “us” or “our”), currently consists of 11 directors: 10 independent directors, and John D. Wren, our Chairman and Chief Executive Officer. Each director stands for election annually and is elected by a majority of votes cast (in an uncontested election). Our Board values the views of our investors regarding board composition and, in response to investor input, has made board refreshment a priority.
■ | |
Our Board succession planning process resulted in the addition of four new independent directors since 2016 who bring important and complementary skills to the Board’s overall composition. |
Deborah J. Kissire, a former Vice Chair and Regional Managing Partner of EY, joined our Board and Audit Committee in March 2016 and Finance Committee in May 2017. | |
Valerie M. Williams, a former Southwest Assurance Managing Partner for EY, joined our Board in October 2016, Audit Committee in December 2016 and Finance Committee in December 2017. | |
Gracia C. Martore, the former President and Chief Executive Officer of TEGNA Inc., joined our Board and Audit Committee in July 2017, joined the Finance Committee in May 2019 and | |
Ronnie S. Hawkins, a Managing Director of Global Infrastructure Partners, joined our Board and Finance Committee in February 2018 and Governance Committee in February 2019. |
■ | Pursuant to the Board’s mandatory retirement age policy, two independent Board members will not stand for re-election at our 2020 Annual Meeting. |
We anticipate continued Board refreshment and remain focused on ensuring a smooth transition and onboarding process for new directors.
DIRECTOR TENURE |
A balanced mix of fresh perspectives and institutional knowledge enables strong Board oversight of management. The 20192020 director tenure chart below illustrates this balance and highlightsreflects the meaningful board refreshment that has been underway over the last several years.
Current Tenure of 2019 Director2020 Nominees
ITEM 1 — ELECTION OF DIRECTORS
QUALIFICATIONS OF THE MEMBERS OF THE BOARD |
In determining the nominees for the Board, our Governance Committee considers the criteria outlined in our Corporate Governance Guidelines including a nominee’s independence, theirhis or her background and experience in relation to other members of the Board, and his or her ability to commit the time and focus required to discharge Board duties. In addition, our Governance Committee considers the composition of the Board as a whole and diversity in its broadest sense, including persons diverse in gender and ethnicity as well as diversity of viewpoints, ages, and professional and life experiences. The Governance Committee considers a broad spectrum of skills and experience to ensure a strong and effective Board and nominees are neither chosen nor excluded solely or largely based on any one factor.
Our Board seeks to align our directors’ collective expertise with those areas most important to strong oversight of management at Omnicom. Accordingly, we periodically evaluate Board composition to help inform Board succession planning efforts, maintain close alignment between Board skills and Omnicom’s long-term strategy, and promote Board effectiveness. We have implemented a rigorous skills analysis for each of our directors and have found that those skill categories with the highest aggregate level of director experience, namely Talent Management, Finance & Accounting, and Risk Management & Controls, align with the areas most critical to Board oversight at Omnicom. The chart below outlines the skill and experience categories our Board periodically evaluates, as well as the importance of each category to overall Board effectiveness.
Risk Management & Controls | Robust risk management is a foundational component of strong Board oversight, and we believe that the Board must include directors who possess a sophisticated ability to understand, measure and mitigate risk. | |
Finance & Accounting | Financial and accounting expertise is essential to ensuring the integrity of our internal controls, critically evaluating our performance, and providing insight and counsel with respect to our financial reporting, capital structure and approach to capital allocation. | |
Talent Management | Our ability to attract and retain the most talented professionals is fundamental to the success of a professional services business such as ours, and the Board’s oversight function is particularly critical with respect to succession planning for our senior leadership team, and ensuring that we continue to prioritize diversity and inclusion. | |
Strategic Planning | Our Board’s ability to effectively review and assess the long-term strategic priorities developed by management, as well as management’s execution against those priorities, is fundamental to our capacity to grow, innovate and create shareholder value. | |
Industry Experience | Directors with experience relevant to our industry are well-suited to help guide the Company in key areas of our business such as advertising, customer relationship management, media buying, public relations and healthcare, and to assess growth opportunities, whether organic or through acquisitions. | |
CEO Experience | We believe that experience serving as a CEO enables directors to contribute deep insight into business strategy and operations, positioning the Board to serve as a valuable thought leader and challenge key assumptions while overseeing management. | |
Legal / Regulatory | Our Board must be able to effectively evaluate Omnicom‘s legal risks and obligations, as well as the complex, multinational regulatory environments in which our businesses operate, to help protect Omnicom’s reputational integrity and promote long-term success. |
ITEM 1 — ELECTION OF DIRECTORS
International Business | Because of Omnicom’s global scale, it is key for our directors to bring experience in international markets and business operations, so that our Board is well-positioned to oversee global strategies and evaluate opportunities for growth outside of the U.S. | |
Technology | Technological experience enables our directors to provide important insight regarding cybersecurity, data privacy and other matters related to our information security and technology systems as we navigate a time of rapid technological advancement industry-wide. | |
Public Company Board Experience | Through their experience serving on the boards of other large publicly traded companies, directors bring a valuable understanding of board functions and effective independent oversight. |
In addition to possessing the skills discussed above, each of our directors must also demonstrate sound judgment, integrity of thought, ethical behavior, critical insight into Omnicom’s businesses, the ability to ask challenging questions of management, and a healthy respect for their fellow Board members.
Independence: ten of our director | Diversity: six of our director nominees are | |||
91% | 73% | |||
Director Independence | Women & Multicultural Directors | |||
Independence: eight of our director | Diversity: six of our director nominees are | |||
89% | 89% | |||
Director Independence | Women & Multicultural Directors | |||
ITEM 1 — ELECTION OF DIRECTORS
TheOf the current 11 members of the Board, nine have been nominated to continue to serve as directors for another year. All of the director nominees have been recommended for election to the Board by our Governance Committee and approved and nominated for election by the Board. We periodically engage a third-party search firm to assist with the evaluation of director candidates.
The Board has no reason to believe that any of the nominees would be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, the Board may, prior to the meeting, select a substitute nominee or undertake to locate another director after the meeting. If you have submitted a proxy and a substitute nominee is selected, your shares will be voted for the substitute nominee.
The Board UNANIMOUSLY recommends that shareholders voteFORall nominees. |
John D. Wren Age Director since 1993 | PROFESSIONAL EXPERIENCE: Mr. Wren is Chairman and Chief Executive Officer of Omnicom, a position he has held since May 2018. He was named Chief Executive Officer in 1997 and elected Chairman in 2018. Mr. Wren KEY SKILLS AND QUALIFICATIONS: Through the positions he has held at Omnicom and its networks, Mr. Wren possesses a combination of broad strategic vision and extensive industry knowledge that is fundamental to the Board’s oversight role and uniquely positions him to serve as Chairman. Mr. Wren’s comprehension of Omnicom, its businesses, its clients and its people is invaluable to the Board’s mix of skills and enables him to provide critical insights to the Board. Over the past several years, Mr. Wren has designed and implemented a significant organizational realignment of Omnicom’s businesses and management, and his leadership in the boardroom greatly enhances the Board’s ability to oversee the development of strategy and guide Omnicom’s future success in an industry that is experiencing rapid change, disruption and market-wide technological advancements. As the former Chief Executive Officer of Omnicom’s DAS Group of Companies division, Mr. Wren has tremendous advertising, marketing and corporate communications experience. Under his leadership, the DAS Group of Companies grew to become Omnicom’s largest operating group, comprised of companies in a wide array of communication disciplines ranging from public relations to branding. Mr. Wren’s deep understanding of our industry gained through his extensive experience, long-term relationships he has developed with key clients, and his relationships with key management around the world contribute to robust Board discussion on a variety of topics central to Omnicom’s success, including identifying competitive advantages, retaining top talent and navigating relationships with our most important clients. Mr. Wren is also a member of the International Business Council of the World Economic Forum, and as such, he has direct exposure to the dynamic issues facing a myriad of international companies. This exposure is a valuable asset to Omnicom and enhances the Board’s ability to judiciously oversee management of Omnicom’s own complex global businesses. |
ITEM 1 — ELECTION OF DIRECTORS
Mary C. Choksi Age Director since 2011 Chair of the Audit Committee and Member of the Compensation Committee | PROFESSIONAL EXPERIENCE: From 1987 to 2017, Ms. Choksi was a founding partner and Senior Manager of Strategic Investment Group, an investment management enterprise which designs and implements global investment strategies for large institutional and individual investors. In addition, Ms. Choksi is a trustee of a number of funds in the Franklin Templeton Funds family. Ms. Choksi was also a founder and, until May 2011, a Managing Director of Emerging Markets Management LLC, which manages portfolios of emerging market equity securities, primarily for institutional investors. Prior to 1987, Ms. Choksi worked in the Pension Investment Division of the World Bank. OTHER PUBLIC COMPANY BOARDS: Ms. Choksi is a director and KEY SKILLS AND QUALIFICATIONS: With her extensive investment management experience, Ms. Choksi brings to the Board a sophisticated comprehension of the financial matters inherent to running a global business enterprise. It is central to Omnicom’s growth and successful financial performance that the Board of Directors’ knowledge base includes Ms. Choksi’s understanding of the utilization of assets to generate growth. Ms. Choksi was a founding partner and Senior Managing Director of the investment management enterprise Strategic Investment Group and a founder, and, until May 2011, a Managing Director of Emerging Markets Management, which manages portfolios of emerging markets securities, primarily for institutional investors. As such, Ms. Choksi has the highest level of experience managing assets, evaluating investment risk, developing investment strategies and determining the optimal use of corporate assets. In addition, Ms. Choksi’s career includes 10 years of experience at the World Bank, primarily working in the Bank’s development arm focusing on projects in South and Southeast Asia. Through this role, Ms. Choksi acquired a keen appreciation of the many challenges facing a multinational institution as it navigates foreign markets and hones its global investment strategies. Ms. Choksi also has considerable experience as a member of the board and audit committees of other public companies. Collectively, this experience and learning significantly enhances the function of Omnicom’s Audit Committee on which Ms. Choksi serves as Chair. In addition, Ms. Choksi’s breadth of experience is an extremely valuable component of the overall mix of skills necessary for the Board to effectively oversee the development of Omnicom’s diversified global businesses. |
ITEM 1 — ELECTION OF DIRECTORS
Leonard S. Coleman, Jr. Age Director since 1993 Lead Independent Director , Chair of the Governance Committee and Member of the Compensation | PROFESSIONAL EXPERIENCE: Mr. Coleman was Senior Advisor, Major League Baseball, from 1999 through 2005. Previously, he was Chairman of Arena Co., a subsidiary of Yankees/Nets, until September 2002. Before that, he was President of The National League OTHER PUBLIC COMPANY BOARDS: Mr. Coleman is KEY SKILLS AND QUALIFICATIONS: Mr. Coleman brings a diverse array of senior-level business experience to Omnicom’s Board of Directors, enhancing the effectiveness of its independent oversight of management. The experience acquired throughout Mr. Coleman’s career includes more than a decade of senior management experience in Major League Baseball, including as President of the National League. Mr. Coleman’s qualifications also include service on the boards of several large public companies, providing him with a sophisticated understanding of the operational and financial aspects of businesses, both domestic and international. Mr. Coleman possesses tremendous governance experience gained |
ITEM 1 — ELECTION OF DIRECTORS
Susan S. Denison Age Director since 1997 Chair of the Compensation Committee and Member of the Governance Committee | PROFESSIONAL EXPERIENCE: Ms. Denison is a former partner of Cook Associates, a retained executive search firm, a position she held from June 2001 to April 2015. Ms. Denison has more than twenty years of senior executive experience within the media, entertainment and consumer products industries. She formerly served as a Partner at TASA Worldwide/Johnson, Smith & Knisely and the Cheyenne Group. She has also served as Executive Vice President, Entertainment and Marketing for Madison Square Garden, Executive Vice President and General Manager at Showtime Networks’ Direct-To-Home Division, Vice President, Marketing for Showtime Networks and Senior Vice President, Revlon. In addition, Ms. Denison previously held marketing positions at Charles of the Ritz, Clairol and Richardson-Vicks. KEY SKILLS AND QUALIFICATIONS: With her many years of experience in media and marketing, including multiple senior management roles for companies as varied as Richardson-Vicks, Clairol, Showtime Networks, Revlon and Madison Square Garden, Ms. Denison provides Omnicom and its Board with a deep understanding of consumer behavior and a strategic vision of the business operations of Omnicom’s agencies. As former Partner of an executive search firm and an executive within the media, entertainment and consumer products industries, Ms. Denison brings to the Board an intimate familiarity with executive compensation practices, as well as an extensive knowledge of complex media strategies, the oversight of management, and consumer market insights. Ms. Denison’s leadership experience as a Partner at Cook Associates where she was involved in executive recruiting of the most senior executives, generally at the “C Suite” level, provides her with unparalleled knowledge of the compensation policies and practices of large public companies. This knowledge is an extremely valuable contribution to her role as Chair of Omnicom’s Compensation Committee and better enables the Board to perform its function of overseeing management retention and succession. Ms. Denison also brings an international perspective to the Board through her prior service on the Board and Compensation Committee of a company listed on the Tel-Aviv Stock Exchange. |
Ronnie S. Hawkins Age Director since 2018 Member of the Governance and Finance Committees | PROFESSIONAL EXPERIENCE: Mr. Hawkins is a Managing Director of Global Infrastructure Partners, a position he has held since April 2018. Global Infrastructure Partners is an infrastructure focused private equity firm with over KEY SKILLS AND QUALIFICATIONS: Mr. Hawkins has extensive strategic planning and corporate advisory experience developed over many years of identifying and managing energy investments for EIG Global Energy Partners and, more recently, for Global Infrastructure Partners. With a focus on investments outside of the U.S., Mr. Hawkins possesses an in-depth understanding of the complex regulations governing international business operations and contributes the highest level of international experience to the Board’s mix of skill sets. Mr. Hawkins also served as a senior executive at General Electric for several years where he managed acquisitions, divestitures and joint ventures while leading GE Energy’s Global Business Development activities. Having structured and overseen a great number of business transactions encompassing varied and complex business strategies, Mr. Hawkins has honed an acute understanding of strategic planning, business operations and the role of management. This background and knowledge serves as a key component of the Board’s effective oversight of Omnicom and its management. Having held several senior positions at Citigroup and Credit Suisse leading corporate financings and advising public companies on large transactions, Mr. Hawkins brings valuable investment banking expertise to the Board and the Finance |
ITEM 1 — ELECTION OF DIRECTORS
Deborah J. Kissire Age Director since 2016 Member of the Audit and Finance Committees | PROFESSIONAL EXPERIENCE: Ms. Kissire held multiple senior leadership positions at EY during her career from 1979 to 2015, serving most recently as Vice Chair and Regional Managing Partner, member of the Americas Executive Board and member of the Global Practice Group. Other positions held include the U.S. Vice Chair of Sales and Business Development and National Director of Retail and Consumer Products Tax Services. Throughout her career at EY, Ms. Kissire’s leadership skills and vision were leveraged for strategic firm initiatives and programs such as their Partner Advisory Council, Strategy Task Force, Gender Equity Task Force, Vision 2000 Sales Task Force, and global Vision 2020. OTHER PUBLIC COMPANY BOARDS: Ms. Kissire is a director and Chair of the Audit Committee of Cable One, Inc., a company that provides customers with cable television, high-speed Internet and telephone services, and a director, Chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee of Axalta Coating Systems Ltd., a manufacturer of liquid and powder coatings. KEY SKILLS AND QUALIFICATIONS: Ms. Kissire brings several key skills to the Board’s overall mix of knowledge and experience. Throughout a career of 36 years at EY, an internationally recognized accounting firm, Ms. Kissire distinguished herself in a variety of roles. She gained extensive experience serving in senior positions at EY and developed a sophisticated ability to gauge risk in financial, accounting and tax matters. Under Ms. Kissire’s leadership, the size of EY’s Mid-Atlantic practice more than doubled. Through her experience and leadership capabilities, Ms. Kissire has proven herself to possess not only an in-depth understanding of the global financial and taxation regulations facing a business such as Omnicom, but also a keen understanding of how to effectively grow a complex business. Among her leadership roles at EY, Ms. Kissire served as an executive advisor for the firm’s offering in Cyber Economic Security, giving her a unique perspective on digital vulnerabilities and methods of preventing and mitigating cyber-attacks. Taken together, these skills comprise an important component of the Board’s aggregation of skill-sets and make Ms. Kissire an extremely effective member of the Board and Audit and Finance Committees. Further, Ms. Kissire also serves as a director on two other public company boards, |
Gracia C. Martore Age Director since 2017 Chair of the Finance Committee and Member of the Audit | PROFESSIONAL EXPERIENCE: Ms. Martore is the former President and Chief Executive Officer of TEGNA Inc., one of the nation’s largest local media companies formerly known as Gannett Co., Inc., a position she held from October 2011 to June 2017. Ms. Martore held various leadership roles over her 32-year career at TEGNA, including as President and Chief Operating Officer from 2010 to 2011, Executive Vice President and Chief Financial Officer from 2005 to 2010 and Senior Vice President and Chief Financial Officer from 2003 to 2005. Prior to TEGNA, Ms. Martore worked for 12 years in the banking industry. Ms. Martore is also a member of the Board of Directors of FM Global and The Associated OTHER PUBLIC COMPANY BOARDS: Ms. Martore is a director, Chair of the Audit Committee and member of the Compensation and Executive Committees of WestRock Company, a multinational provider of paper and packaging solutions for the consumer and corrugated packaging markets, and a director and member of the Compensation and Nominating and Corporate Governance Committees of United Rentals, Inc., the world’s largest equipment rental company. In addition, Ms. Martore served as a director of TEGNA Inc. during the last five years. KEY SKILLS AND QUALIFICATIONS: Having served as President and Chief Executive Officer of TEGNA Inc., formerly Gannett Co., one of the nation’s largest local media companies, Ms. Martore brings strong leadership skills, broad strategic vision, financial expertise and proven business acumen to the Board. Ms. Martore’s successful navigation of TEGNA’s strategy through a period of significant technological disruption within its industry strengthens the collective oversight function of Omnicom’s Board as it assesses risk and evaluates strategies regarding technological advances implemented by our agencies. Under her leadership, |
ITEM 1 — ELECTION OF DIRECTORS
Linda Johnson Rice Age Director since 2000 Member of the Governance and Compensation Committees | PROFESSIONAL EXPERIENCE: Ms. OTHER PUBLIC COMPANY BOARDS: Ms. KEY SKILLS AND QUALIFICATIONS: Ms. |
Valerie M. Williams Age Director since 2016 Member of the Audit and Finance Committees | PROFESSIONAL EXPERIENCE: Ms. Williams is a former Southwest Assurance Managing Partner for EY, a position she OTHER PUBLIC COMPANY BOARDS: Ms. Williams is a director and member of the Audit Committee of WPX Energy, Inc., an independent oil and natural gas exploration and production company engaged in the exploitation and development of long-life unconventional properties, and a director, KEY SKILLS AND QUALIFICATIONS: Ms. Williams has |
ITEM 1 — ELECTION OF DIRECTORS
DIRECTOR INDEPENDENCE |
Our outside directors, including those not nominated for re-election, are Alan R. Batkin, Mary C. Choksi, Robert Charles Clark, Leonard S. Coleman, Jr., Susan S. Denison, Ronnie S. Hawkins, Deborah J. Kissire, Gracia C. Martore, Linda Johnson Rice and Valerie M. Williams. Our Board has determined that all of our outside directors are “independent” within the meaning of the rules of the New York Stock Exchange (“NYSE”), as well as under our Corporate Governance Guidelines. Our Corporate Governance Guidelines are posted on our website at http://www.omnicomgroup.com. In determining that each of our outside directors is independent, the Board took into consideration the answers to annual questionnaires completed by each of the directors, which covered any transactions with director-affiliated entities. The Board also considered that Omnicom and its subsidiaries occasionally and in the ordinary course of business, sell products and services to, and/or purchase products and services from, entities (including charitable foundations) with which certain directors are affiliated. The Board determined that these transactions were not material to Omnicom or the entity and that none of our directors had a material interest in the transactions with these entities. The Board therefore determined that none of these relationships impaired the independence of any outside director. John D. Wren, our Chairman and Chief Executive Officer, is not independent due to his position as an executive officer.
SHAREHOLDER NOMINATION PROCESS |
Nominations for directors at our 20202021 Annual Meeting of Shareholders may be made only by the Board, or by a shareholder entitled to do so pursuant to our By-laws not later than the deadlines set forth belowon page 77 in the section entitled “Shareholder Proposals and Director Nominations for the 20202021 Annual Meeting.”
Our By-laws provide that shareholders may present director nominations directly at the annual meeting (and not for inclusion in our proxy statement) by satisfying certain advance notice requirements, and providing information as to such nominee and submitting shareholder as specified in our By-laws. Our By-laws also permit a shareholder or group of up to 20 shareholders owning 3% or more of the Company’s common stock continuously for at least three years to nominate and include in the Company’s proxy statement director candidates constituting up to 20% of the Board, but no less than two, to be considered for election by the holders of the Company’s common stock, provided that the shareholder (or group) and each nominee satisfy the requirements and provide information as to such nominee and submitting shareholder as specified in our By-laws.
You can obtain a copy of the full text of the By-law provisions noted above by writing to our Corporate Secretary at our address listed below in the section entitled “Availability of Certain Documents,” or on our website at http://www.omnicomgroup.com. Our By-laws have also been filed with the U.S. Securities and Exchange Commission (“SEC”).
The Governance Committee will consider all candidates recommended by our shareholders in accordance with the procedures included in our By-laws and this Proxy Statement. We did not receive any nominee recommendations from shareholders this year. Any future director candidate recommendations made by shareholders that are properly submitted will be considered by the Governance Committee in the same manner as those submitted by the Board or the Governance Committee itself.
ITEM 1 — ELECTION OF DIRECTORS
MAJORITY VOTING STANDARD FOR ELECTION OF DIRECTORS |
In accordance with our By-laws, directors are elected by a majority of the votes cast. That means the nominees will be elected if the number of votes cast “for” a director’s election exceeds the number of votes cast “against” such nominee. For this purpose, broker non-votes will not count as a vote cast and will have no effect on the elections of directors. Our form of proxy permits you to abstain from voting “for” or “against” a particular nominee. However, shares represented by proxies so designated will count as being present for purposes of determining a quorum but will not count as a vote cast and will have no effect on the election of directors. Such proxies may also be voted on other matters, if any, that may be properly presented at the meeting.
If an incumbent nominee is not reelected,re-elected, New York law provides that the director would continue to serve on the Board as a “holdover director.” Under our By-laws and a policy adopted by the Board, such a director is required to promptly tender his or her resignation to the Board. The Governance Committee of the Board must then must consider whether to accept the director’s resignation and make a recommendation to the Board. The Board will then consider the resignation, and within 90 days after the date of certification of the election results, publicly disclose its decision and the reasons for its decision.
A director whose resignation is under consideration may not participate in any deliberation regarding his or her resignation unless none of the directors received a majority of the votes cast. If the Board accepts a director’s resignation, the Board will then elect a replacement in accordance with the By-laws.
Board’s Role and Responsibilities
STRATEGIC OVERSIGHT |
The Board oversees Omnicom’s strategy setting and review process, which is led by the Company’s management team and is focused on execution of a long-term strategy to deliver value to our shareholders. The Board reviews and assesses the strategic priorities developed and implemented by management under the direction of Omnicom’s Chairman and CEO, John Wren. The Board reviews Omnicom’s financial performance throughout the year and evaluates strategy in light of results, with an industry focus that includes peer comparisons and our competitive ability to attract and retain the most talented workforce. At least annually, the Board has a more detailed discussion, generally over two days, which is informed by reports from management on a variety of strategic matters and input regarding strategic goals of Omnicom’s networks and practice areas. At this meeting, the Board receives a complete analysis of the strategies with respect to the multiple business components integral to Omnicom’s comprehensive long-term strategic direction. This meeting also includes management presentations on important topics such as risk management, diversity and inclusion, information technology, cybersecurity and our data breach incident plan, human capital management, and top clients. Our Board believes this comprehensive process greatly strengthens its ability to effectively oversee management as Mr. Wren and senior leadership drive the future success of our Company.
RISK OVERSIGHT |
Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance shareholder value. The principal oversight function of the Board and its committees includes understanding the material risks the Company confronts and methods to mitigate or manage those risks. Management is responsible for identifying and assessing the related risks and establishing appropriate risk management practices. Our Board reviews management’s assessment of the related risk, and discusses with management the appropriate level of risk for the Company.
ITEM 1 — ELECTION OF DIRECTORS
OUR BOARD OF DIRECTORS Administers its risk oversight function with respect to our operating risk as a whole, and the Board and its committees meet with management at least quarterly to receive updates with respect to our business operations and strategies, financial results and the monitoring of related risks. The Board also delegates oversight to the Audit, Governance, Compensation and Finance Committees to oversee selected elements of risk: | ||||
OUR AUDIT COMMITTEE Oversees financial risk exposures, including monitoring the integrity of the financial statements, internal control over financial reporting, and the independence of the independent auditors of the Company. The Audit Committee inquires of management and the independent auditors about significant risks or exposures and assesses management’s actions in light of any such risks, and also discusses guidelines and policies governing the process by which management of the Company assesses and manages the Company’s exposure to risk. The Audit Committee receives an assessment report from the Company’s internal auditors on at least an annual basis and more frequently as appropriate. The Audit Committee oversees the Company’s cybersecurity risk management programs and | ||||
OUR GOVERNANCE COMMITTEE Oversees governance-related risk by working with management to establish Corporate Governance Guidelines and policies applicable to the Company and our management, including recommendations regarding director nominees, the determination of director independence, Board leadership structure and membership on Board committees. The Company’s Governance Committee also oversees risk by working with management to adopt codes of conduct and business ethics designed to encourage the highest standards of business conduct and ethics. | ||||
OUR COMPENSATION COMMITTEE Oversees compensation-related risk by working with management in the creation of compensation structures that create incentives to encourage a level of risk-taking behavior consistent with the Company’s business strategy. | ||||
OUR FINANCE COMMITTEE Oversees financial, credit and liquidity risk by overseeing our Treasury function to evaluate elements of financial and credit risk and advise on our financial strategy, capital structure, capital allocation and long-term liquidity needs, and the implementation of risk mitigating strategies. | ||||
THE COMPANY’S MANAGEMENT Responsible for day-to-day risk management. The CEO, CFO and General Counsel periodically report on the Company’s risk management policies and practices to relevant Board committees and to the full Board. Our Treasury, Legal, Controller, Information Technology, and Internal Audit functions work with management at the agency level, serving as the primary monitoring and testing function for company-wide policies and procedures, and managing the day-to-day oversight of risk management strategy for the ongoing business of the Company. We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing the Company and that our Board leadership structure supports our approach. | ||||
ITEM 1 — ELECTION OF DIRECTORS
Diversity and Corporate Responsibility
DIVERSITY AND INCLUSION |
Omnicom believes that workplace diversity creates value for the Company, enhances the quality of work we create for clients and is a cornerstone of our positive corporate culture. We know that a workforce reflecting the demographics of our society is better poised to create effective campaigns for our clients that resonate with a diverse population. With our global presence, we believe it is important that our workforce reflects our global community. This commitment to diversity starts within the boardroom. Our Board includes six women and four African Americans, including Leonard S. Coleman, Jr., our Lead Independent Director. Our Audit, Compensation and Finance Committees are Chaired by female directors, and the Chair of our Governance Committee is African American. The diversity of our Board was recognized by Fortune Magazine, with Omnicom being named one of only six Fortune 500 companies that has more women than men on its Board of Directors. Across the Company, we are committed to recruiting and retaining the best talent from diverse backgrounds, experiences and perspectives and have implemented key programs and initiatives to ensure we deliver on this commitment. These efforts include:
■ | Internal focus and accountability– Omnicom created the role of Senior Vice President and Chief Diversity Officer at our corporate office in 2009, reporting directly to the CEO, and this role has since been expanded throughout our Company. Our individual networks now employ their own Directors of Diversity or Chief Diversity Officers, and throughout Omnicom and its networks, |
■ | Omnicom People Engagement Network (OPEN)– led by |
■ | OPEN Pride– |
■ | OPEN DisAbility– launched in May 2019, this sub-group of OPEN is Omnicom’s disability business resource group that seeks to drive disability representation, raise awareness of those who have a visible or invisible disability, and build a community approach towards helping our agencies become truly inclusive of persons with disabilities. |
■ | Omniwomen– is a global initiative with multiple chapters around the world intended to serve as a catalyst to increase the influence and number of women leaders across the Omnicom networks. Leading this initiative are the most senior women executives across Omnicom and its agencies. |
■ | ADCOLOR– Omnicom supports this network of outstanding diverse professionals and champions of diversity and inclusion. At the annual ADCOLOR Conference, diverse professionals at all levels within the industry are honored for their personal contributions and efforts to open doors for other high-potential, diverse professionals. |
■ | |
Supplier diversity– In partnership with |
We have been publicly recognized for our commitment to inclusion and diversity initiatives. In October 2019,The Wall Street Journalreleased its own diversity and inclusion ranking of companies in the S&P 500. Omnicom was tied for third place overall and ranked first for the Communication Services industry. We were also named to the Forbes 2019 America’s Best Employers List for the fourth straight year and included in the Forbes 2020 list of America’s Best Employersfor Diversity. In 2019, Omnicom was a proud Platinum sponsor for the first-ever, groundbreaking WorldPride celebrationin New York City. Working closely with NYC Pride, several Omnicom agencies joined forces to provide branding and public relations work for the 2019 celebration, a project that took place over the course of two years. For eachthese reasons and more, Omnicom achieved a perfect score of 100 percent for the past three years, Omnicom has been designated as one offourth consecutive year on the “Best Places to Work for LGBT Equality”Corporate Equality Index (CEI) administered by the Human Rights Campaign FoundationFoundation. This index is a nationally recognized benchmarking tool for corporate inclusivity policies, benefits and received apractices pertinent to LGBTQ employees. Due to our high score, of 100 percent on the foundation’s Corporate Equality Index survey. Our Senior Vice President and Chief Diversity Officer was recognized as the 2015 Global Diversity Champion by the European Diversity Awards. Our Chairman and CEO, John Wren, was honoredwe were designated as a pioneer and supporter of diversity by the American Advertising Federation at their 2013 Diversity Achievement and Mosaic Awards, and Omnicom Group was recognized as a Diversity Pioneer at the 2012 Diversity Achievement and Mosaic Awards.2020 “Best Place to Work for LGBTQ Equality.”
ITEM 1 — ELECTION OF DIRECTORS
Omnicom shares the following key diversity statistics on its website: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
■ | |
■ | The U.S. “Professional” talent base is |
■ | Women make up |
■ | Of the approximately |
■ | Of the |
|
We believe that these statistics clearly reflect the value Omnicom places on workplace diversity and the strength of its efforts to promote professional opportunities for women and diverse individuals.
CORPORATE RESPONSIBILITY |
At Omnicom, we’re committed to promoting sustainable practices and making positive contributions to society around the globe. Our corporate responsibility efforts spread across four key areas: supporting our communities, creating a dynamic and diverse workforce, managing our environmental footprint and ensuring a strong governance structure.
■ | Omnicom has set corporate responsibility goals relating to our people, environment, and governance helping guide our sustainability initiatives across the business. |
■ | Omnicom is a signatory to the United Nation’s Global Compact (UNGC). |
■ | Omnicom and its global agencies are supporting the UN Sustainable Development Goals (SDGs) through a variety of initiatives. As a pro bono global marketing and communications partner for Theirworld, Omnicom is working to ensure inclusive and quality education for children around the world, contributing to SDG 4. |
■ | As a strategic partner and |
■ | Omnicom is committed to supporting and respecting human rights, including the right of our employees to be hired and promoted based on their qualifications and merit. Please see our Human Rights Policy, which is available on our website at http://www.omnicomgroup.com for more information. |
■ | Omnicom is committed to reducing our environmental footprint, primarily by consolidating office space and installing more energy-efficient heating and cooling systems, as detailed in our Environmental Policy which is available on our website at http://www.omnicomgroup.com. |
Our | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
■ | As a signatory to the UNGC, we have pledged to support ten universal principles, including protecting human rights, promoting fair labor practices, protecting the environment and rooting out corruption. |
■ | |
■ | In |
|
Learn more at http://csr.omnicomgroup.com.
ITEM 1 — ELECTION OF DIRECTORS
Communications with Shareholders
SHAREHOLDER ENGAGEMENT |
We are strongly committed to shareholder outreach, supported and overseen by the Board, and believe regular, transparent communication with our shareholders is important to our long-term success. Mr. Coleman, our Lead Independent Director, actively participates in selected investor meetings each year. To ensure that we fully address any shareholder concerns, shareholder feedback is shared with the Governance and Compensation Committees, as appropriate, as well as with the full Board.
Spring | Summer | |
Winter | Fall |
During the last year, we reached out to shareholders representing more than 60%68% of our outstanding shares and engaged with shareholders representing over 40%25% of our outstanding shares, or every shareholder that accepted our invitation for engagement, in a continued effort to foster a successful shareholder outreach program, establishing and deepening the relationships with the governance teams at many of our largest investors. As in prior years, Mr. Coleman participatedwas a participant in select shareholder engagement with approximately 10% of our outstanding sharesmeetings and shared feedback with the full Board.
Based on the feedback we received from shareholders,In recent years, the Board has taken significant steps to be responsive to their concerns raised by shareholders, including adoption ofadopting a board retirement policy described in the section entitled “Director Retirement Policy” on page 3130 that has resulted in sixeight of our Board members stepping down betweenfrom the Board since May of 2016, and May of 2018. The Board also carefully considered shareholder input in determining to reduceincluding the ownership threshold requiredtwo directors not standing for shareholders to call a special meeting from 25% to 10% in response tore-election at the shareholder proposal that received 50.3% support at our 20182020 Annual Meeting. For a more complete summary of the feedback we heard from shareholders and actions taken by the Board, please refer to page 76 of our Proxy Summary. We value our investors’ views regarding our Company, as well as their opinions on corporate governance best practices.practices and have enhanced our corporate responsibility and diversity disclosure in response to input received. Our Board and management found this engagement constructive and informative, and we will continue our engagement efforts. In addition to the direct input of our shareholders, we also consider the Investor Stewardship Group’s six corporate governance principles for U.S. listed companies.
SHAREHOLDER COMMUNICATIONS WITH BOARD MEMBERS |
Interested parties, including shareholders, may communicate (if they wish on a confidential, anonymous basis) with the outside directors, the Chairs of our Audit, Compensation, Finance and Governance Committees or any individual director (including our Lead Independent Director who presides over the executive sessions of our independent non-management directors) on board-related issues by writing to such director, the Committee Chair or to the outside directors as a group c/o Corporate Secretary at Omnicom Group Inc., 437 Madison Avenue, New York, New York 10022. The envelope should clearly indicate the person or persons to whom the Corporate Secretary should forward the communication. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications.
24 | 2020Proxy Statement |
ITEM 1 — ELECTION OF DIRECTORS
LEAD INDEPENDENT DIRECTOR, CHAIRMAN AND CEO ROLES |
Our Governance Committee, as well as the full Board when appropriate, regularly evaluates the leadership structure of our Board to determine what arrangement is most appropriate for the Company and shareholders. The Board believes that it is important to maintain flexibility to determine the appropriate leadership structure based on Company circumstances at the time, and that our directors are best positioned to lead this evaluation given their unique insight into Omnicom’s business, leadership team, culture, opportunities and challenges. Our Board is currently led by a Lead Independent Director, a Chairman/our Chairman and CEO, and four independent Committee Chairs. The Board believes this to be the optimal Board leadership structure for Omnicom at present, combining strong independent leadership with the benefits of having our CEO chair Board meetings in which strategic business matters are routinely discussed.
ITEM 1 — ELECTION OF DIRECTORS
In anticipation of our former Executive Chairman, Bruce Crawford, retiring in May of 2018,While the Board spent considerable time evaluatingregularly evaluates its leadership structure and assessingassesses various succession options. Ultimately,options, the Board determinedstrongly believes that it wasis critical to the future success of our Company to appointthat our CEO, Mr. Wren, serve as Chairman following Mr. Crawford’s retirement. In makingat this decision, thetime. The Board evaluatedevaluates a range of factors in determining its leadership structure, including the complexity of our business;business, our ongoing organizational realignment;realignment, our robust Lead Independent Director role;role, and feedback from our shareholders regarding Omnicom’s leadership structure:
■ | Business Complexity:The Board | ||
■ |
| ||
■ | Robust Lead Independent Director Role:Our Lead Independent Director role at Omnicom has evolved to include significant responsibilities, similar to those typically overseen by an | ||
■ | Shareholder Feedback:The Board carefully |
While the Board is confident that this leadership structure is best suited to the current needs of the business, the Board remains committed to rigorously evaluating Omnicom’s leadership structure each year and to gathering shareholder feedback on this matter through ongoing engagement.
ITEM 1 — ELECTION OF DIRECTORS
LEAD INDEPENDENT DIRECTOR |
Our Board is committed to improving the Company’s corporate governance practices, and we have significantly enhanced the responsibilities of our Lead Independent Director’s role to strengthen the Board’s independent oversight of management. This individual would typically also serve as a member of the Governance Committee and, as such, participate in director and CEO succession planning. Currently, our Lead Independent Director also serves as Chair of the Governance Committee. The responsibilities of the Lead Independent Director were most recently enhanced in February 2019. In addition to the responsibilities of all directors, our Lead Independent Director’s other duties, which the Board continues to evaluate through engagement with shareholders, include:
■ | Preside at executive sessions of the independent directors; |
■ | Preside at all meetings of the Board at which the Chairman is not present; |
■ | Serve as principal liaison between the independent directors and the Chairman and CEO; |
Participate in director recruitment, mentoring and development; |
■ | Oversee the annual Board and committee evaluations; |
■ | Participate in developing agendas for Board meetings, with the authority to add agenda items; |
Approve the schedule of Board meetings, with the authority to call meetings of independent directors; | |
Oversee conflicts of interest of all directors, including the Chairman and CEO; | |
Advise the Chairman, including providing input as to the quality, quantity and timeliness of information provided to the Board; |
■ | Engage and consult with shareholders as part of our shareholder engagement process; and |
■ | Perform such other duties as the Board may from time to time delegate. |
We believe that this leadership structure enhances the accountability of the Chairman and CEO to the Board and strengthens the Board’s independence from management.
On the recommendation of the Governance Committee, the independent members of our Board designate the Lead Independent Director annually. In May |
ITEM 1 — ELECTION OF DIRECTORS
BOARD OPERATIONS AND COMMITTEE STRUCTURE |
Our Board met six times during 2018.2019. The Board generally conducts specific oversight tasks through committees so that the Board as a whole can focus on strategic matters and those particular tasks that by law or custom require the attention of the full Board. Our Board has established four standing committees, functioning in these areas, as explained more fully below:
■ | audit and financial reporting |
■ | management/compensation |
■ | corporate governance |
■ | finance and acquisitions/divestitures |
26 | 2020Proxy Statement |
ITEM 1 — ELECTION OF DIRECTORS
Each of the committees operates under a written charter recommended by the Governance Committee and approved by the Board. The Board operates pursuant to our Corporate Governance Guidelines. Each Board committee is authorized to retain its own outside advisors. Our Corporate Governance Guidelines and committee charters, which have been approved by the Board, are posted on our website at http://www.omnicomgroup.com. The table below provides current membership for each Board committee.
Director | Audit | Compensation | Governance | Finance | Audit | Compensation | Governance | Finance | ||||||||
Alan R. Batkin | ||||||||||||||||
Mary C. Choksi | ||||||||||||||||
Robert Charles Clark | ||||||||||||||||
Leonard S. Coleman, Jr. | ||||||||||||||||
Susan S. Denison | ||||||||||||||||
Ronnie S. Hawkins | ||||||||||||||||
Debbie J. Kissire | ||||||||||||||||
Deborah J. Kissire | ||||||||||||||||
Gracia C. Martore | ||||||||||||||||
Linda Johnson Rice | ||||||||||||||||
Valerie M. Williams | ||||||||||||||||
John D. Wren | ||||||||||||||||
Number of Meetings in 2018 | 10 | 9 | 7 | 6 | ||||||||||||
Number of Meetings in 2019 | 12 | 8 | 6 | 7 |
Member | |
Chair |
ITEM 1 — ELECTION OF DIRECTORS
AUDIT COMMITTEE Meetings in | The Audit Committee’s purpose is to assist the Board in carrying out its financial reporting and oversight responsibilities, including oversight of risk as described in “Risk Oversight” beginning on page The Board has determined that each member of our Audit Committee is “independent” within the meaning of both the rules of the NYSE and Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has also determined that each member of our Audit Committee is an “audit committee financial expert,” is “financially literate” and has “accounting or related financial management expertise,” as such qualifications are defined by SEC regulations and the rules of the NYSE, respectively. | |
COMPENSATION COMMITTEE Meetings in | The Compensation Committee’s purpose is (a) to assist the Board in carrying out its oversight responsibilities relating to compensation matters, including oversight of risk as described in “Risk Oversight” beginning on page The Board has determined that each member of our Compensation Committee is “independent” within the meaning of the rules of the NYSE and a “non-employee director” within the meaning of the rules of the SEC. |
www.omnicomgroup.com | 27 |
ITEM 1 — ELECTION OF DIRECTORS
GOVERNANCE COMMITTEE Meetings in | The Governance Committee’s purpose is to assist the Board in carrying out its oversight responsibilities, including oversight of risk as described in “Risk Oversight” beginning on page ■director nominees and underlying criteria for election to the Board and its committees; ■the structure, responsibilities ■standards and procedures for review of the performance of the Board and its ■the election of the Chief Executive Officer and other officers required to be elected by the Board; ■our Certificate of Incorporation and By-laws; ■our Corporate Governance Guidelines generally, including with respect to director qualification standards, responsibilities, access to management and independent advisors, orientation and continuing education, and ■shareholder proposals made under SEC rules; ■the Code of Business Conduct applicable to our directors, officers and employees; ■the Code of Ethics applicable to our senior financial officers; ■the charters of the Board committees; and ■the Governance Committee’s performance of its own responsibilities. The Governance Committee also oversees our shareholder engagement efforts and periodically receives reports from management on shareholder feedback. The Board has determined that each member of our Governance Committee is “independent” within the meaning of the rules of the NYSE. | |
FINANCE COMMITTEE Meetings in | The Finance Committee’s purpose is to assist the Board in carrying out its oversight responsibilities relating to financial matters affecting Omnicom, including in respect of acquisitions, divestitures and financings and the oversight of risk as described in “Risk Oversight” beginning on page |
ITEM 1 — ELECTION OF DIRECTORS
EXECUTIVE SESSIONS |
As a matter of policy, the independent, non-management directors regularly meet in executive session, without management present. The independent directors met six times in 2018.2019. Mr. Coleman, our Lead Independent Director, presides over executive sessions of the Board.
DIRECTOR ATTENDANCE |
EachAttendance at Board and committee meetings during 2019 averaged 99% for the directors as a group. Except for two directors who each missed one committee meeting, and had a 96% attendance record, each of our other directors attended 100% of the meetings of the Board and the committees of the Board on which he or she served during 2018, except one director who missed one committee meeting.2019. We encourage our directors to attend our annual meetings of shareholders, and all of our directors attended the 20182019 Annual Meeting of Shareholders.
BOARD AND COMMITTEE EVALUATION PROCESS |
Every year, the Board and its committees each conduct a self-evaluation to help promote Board and committee effectiveness. The Governance Committee leads the evaluation process, which is overseen by our Lead Independent Director. The process allows directors to evaluate the Board as a whole and the standing committees of the Board on which each director serves through questionnaires covering topics such as:
Our Governance Committee recommends to the full Board a plan for any changes to the functions of our Board or its committees including on structure, responsibilities, performance and composition. The Governance Committee reviews the composition of the Board and recommends to the full Board nominees for election. The Governance Committee identifies the skills and experience needed to replace any departing director and performs research, either itself or by engaging third parties to do so on its behalf, to identify and evaluate director candidates. ITEM 1 — ELECTION OF DIRECTORS
Our mandatory retirement age policy for directors provides that no director shall be nominated for election or re-election to the Board if the director has reached 75 years of age on or before December 31st of the year preceding election or
The following directors served as members of our Compensation Committee during all or a portion of
We review all relationships and transactions between Omnicom or its subsidiaries and related persons to determine whether such persons have a direct or indirect material interest. Related persons include any director, nominee for director, officer or their immediate family members. Although we do not have a written policy governing such transactions, Omnicom’s legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether the Company or a related person has a direct or indirect material interest in the Based on the information available to us and provided to us by our directors and officers, we do not believe that there were any such material transactions in effect since January 1,
We have a Code of Business Conduct designed to assure that our business is carried out in an honest and ethical way. The Code of Business Conduct applies to all of our directors, officers and employees, as well as all of the directors, officers and employees of our majority-owned subsidiaries, and requires that they avoid conflicts of interest, comply with all laws and other legal requirements and otherwise act with integrity. In addition, we have adopted a Code of Ethics for Senior Financial Officers regarding ethical action and integrity relating to financial matters applicable to our senior financial officers. Our Code of Business Conduct and Code of Ethics for Senior Financial Officers are available on our website at ITEM 1 — ELECTION OF DIRECTORS http://www.omnicomgroup.com, and are also available in print to any shareholder that requests them. We will disclose any future amendments to, or waivers from, certain provisions of these ethical policies and standards for senior financial officers, executive officers and directors on our website within the time period required by the SEC and the NYSE. We also have procedures to receive, retain and treat complaints regarding accounting, financial reporting and disclosure, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters, as well as possible violations of our Code of Business Conduct or Code of Ethics for Senior Financial Officers. The procedures are posted on our website at http://www.omnicomgroup.com and the websites of our various global networks. Directors’ Compensation for Fiscal Year Directors who are also current or former employees of Omnicom or its subsidiaries receive no compensation for serving as directors. The compensation program for directors who are not current or former employees of Omnicom or its subsidiaries is designed to compensate directors in a manner that reflects the work required for a company of Omnicom’s size and composition and to align directors’ interests with the long-term interests of shareholders. The table below includes the following compensation elements with respect to non-employee directors: Annual Compensation.For In accordance with our 2013 Incentive Award Plan (the “2013 Plan”), and our Director Compensation and Deferred Stock Program adopted by our Board on December 4, 2008 (as amended), non-employee directors also receive Our Director Compensation and Deferred Stock Program and 2013 Plan provide that each director may elect to receive all or a portion of his or her cash director compensation for the following year’s service in common stock. Ms. Martore elected to receive all of her Directors may also elect to defer any common shares payable to them, which will be credited to a bookkeeping account in the directors’ names. These elections must be made prior to the start of the calendar year for which the fees would be payable. The number of shares of common stock delivered or credited to a director’s account is based on the fair market value of our common stock on the first trading day immediately preceding the date the fees would have been paid to the director. Each director other than Mr. Coleman and Ms. Lead Independent Director and Committee Chair Fees.The Chairs of our committees and our Lead Independent Director receive the following additional annual fees in cash due to the workload and the additional responsibilities of their positions. Our Lead Independent Director received an additional fee of $35,000 for ITEM 1 — ELECTION OF DIRECTORS
No Other Compensation.Directors received no compensation in Stock Ownership Requirement.The Board encourages stock ownership by directors and, in 2004, we adopted stock ownership guidelines for our directors. The director guidelines provide, in general, that our directors must own Omnicom stock equal to or greater than five times their annual cash retainer within five years of their joining the Board. As of December 31, ____________________ In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act, we are asking shareholders to approve an advisory resolution on the compensation of the Company’s named executive officers as reported in this Proxy Statement. Our executive compensation programs are designed to support the Company’s long-term success. As described below in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:
■support talent development in a rapidly evolving industry; ■maintain a balanced approach to building long-term shareholder value that does not overemphasize a single metric; and ■ensure that executive compensation is aligned with both the short and long-term interests of shareholders. The majority of
ITEM 2 — ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION We urge shareholders to read the “Compensation Discussion and Analysis” below, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative below, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this Proxy Statement has supported and contributed to our success. We are asking shareholders to approve the following advisory resolution at the RESOLVED, that the shareholders of Omnicom Group Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board. Although non-binding, the Board and the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.
Approval of this item requires the favorable vote of the holders of a majority of the shares voting on the item. Abstentions and broker non-votes will have no effect on the outcome of this item. ____________________ Table of Contents EXECUTIVE COMPENSATION
The Compensation Committee is responsible for establishing, implementing and monitoring Omnicom’s executive compensation policies and program. The overarching goals of our compensation program are to:
We accomplish this by: ■closely tying pay to current and long-term performance; ■maintaining a high degree of variable compensation; ■establishing challenging performance metrics that are targeted to the Company, our industry and our business strategy; and ■sustaining competitive compensation levels.
Omnicom is a strategic holding company formed in 1986 and through its branded networks and agencies is a leading global provider of advertising, marketing and corporate communications services to over 5,000 clients in more than 100 countries. We operate in a highly competitive industry and compete against other global, national and regional advertising and marketing services companies, as well as technology, social media and professional services companies. The proliferation of media channels, including the rapid development and integration of interactive technologies and mediums, has fragmented consumer audiences targeted by our clients. These developments make it more complex for marketers to reach their target audiences in a cost-effective way, causing them to turn to global service providers such as Omnicom for a customized mix of advertising and marketing services designed to optimize their total marketing expenditure. On a global, pan-regional and local basis, our networks and agencies provide a comprehensive range of services in the following fundamental disciplines: advertising, customer relationship management (CRM), which includes CRM Consumer Experience and CRM Execution & Support, public relations and healthcare. Our business model was built and continues to evolve around our clients. Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements in a consistent and comprehensive manner. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients. In addition to collaborating through our client service models, our agencies and networks collaborate across internally developed technology platforms, including Annalect, our proprietary data and analytics platform, and Omni, our people-based precision marketing and insights platform. EXECUTIVE COMPENSATION As clients increase their demands for marketing effectiveness and efficiency, they
In a dynamic, yet challenging, environment, our strategies, talent and execution allowed Omnicom to
To meet our clients’ desire for One of our longstanding practice areas, which is very well aligned with our Global Client Leaders Group, is Omnicom Health Group. This group had an outstanding year, which contributed to our overall growth in 2019. Omnicom Health Group is one of the largest healthcare communications groups in the world. The group is able to manage communications across the entire healthcare ecosystem due to its breadth and depth of specialty healthcare agencies that are focused on four key healthcare customers: healthcare professionals, payer organizations, patients and consumers, and medical experts and regulatory stakeholders. The group’s success is driven by its talent. In 2019, the group added 300 healthcare specialists to its roster, which now numbers more than 4,300 people. The group’s success is also
All of our agencies have access to our data and analytics tools, which we have invested in for over a decade. Omni is now available globally in the majority of markets in which we operate. Many of our agencies deploy Omni to create, plan and execute personalized customer experiences at scale for some of our largest clients. The platform is also transforming the way our teams work by providing a single view of their client’s consumers, enabling them to drive precision and marketing across creative, CRM and media. While data and analytics remain a results. The growth of Omnicom’s business in The following highlights some key achievements that reflect our performance in
EXECUTIVE COMPENSATION Omnicom Financial Results and Shareholder Return.
Net income for As reported in Operating profit decreased 0.5% to $2,122.3 million. Earnings before interest, taxes and amortization of intangible assets (“EBITA”) decreased 1.3% to $2,206.1 million. Our operating margin increased to 14.2% versus 14.0% for the same period in 2018. Our EBITA margin increased to 14.8% from 14.6% for the same period in 2018. See Annex A for a discussion of EBITA and EBITA margin, which are Non-GAAP measures, and a reconciliation of net income to EBITA. We generated over
For the year ended December 31, We Remained Focused on Delivering Efficiencies through Our Operational Initiatives.
EXECUTIVE COMPENSATION We Were Recognized for Our Extraordinary Creative Talents.
We continued to make selective acquisitions to broaden our capabilities. We continue to realign and optimize our portfolio agencies through acquisitions and dispositions. Some of our notable EXECUTIVE COMPENSATION
Our commitment to attracting, retaining and developing talent remains our top priority, and we believe this commitment starts at the top with Omnicom’s Board of Directors. Our Board
Additionally, Omniwomen, our employee resource group (ERG) dedicated to For these reasons and more, Omnicom achieved a perfect score Additionally, in October,The Wall Street Journalreleased its own diversity and inclusion ranking of companies in the Our commitment to hiring and developing the best talent is unwavering. As part of that, we continually invest in first-rate professional development opportunities. This includes our management development program, Omnicom University, which was founded in 1995 and celebrated its 25thanniversary in 2019. This prestigious program has grown to offer 12 programs a year on three continents with nearly 5,400 global alumni, and in December 2019, we announced Karen van Bergen as its newest Dean. Additional information on our diversity efforts is set forth above in the section entitled “Diversity and Inclusion.”
EXECUTIVE COMPENSATION
These and other
Omnicom strives to link closely executive compensation to performance by making a significant portion of potential compensation variable, as well as long-term performance driven. The more senior the executive, the lower his or her base pay will be as a proportion of his or her entire compensation package and the higher 2019 CEO Compensation Mix The process by which incentive compensation awards were determined for performance in fiscal year
EXECUTIVE COMPENSATION
The Compensation Committee believes that our executive compensation program aligns with performance, reflects our business philosophy and utilizes competitive practices regarding executive compensation in a highly competitive industry. At our During the last year, we reached out to shareholders representing The Compensation Committee, which is comprised solely of independent members of the Board, has reviewed the “Compensation Discussion and Analysis” and discussed the analysis with management. Based on its review and discussions with management, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in Omnicom’s Members of the Compensation Committee EXECUTIVE COMPENSATION Compensation Discussion & Analysis
Compensation Decision Process The Compensation Committee annually reviews and approves the compensation of the NEOs. To aid the Compensation Committee in making its compensation determinations, the Chief Executive Officer annually reviews the performance of each other NEO by evaluating the performance factors described in this Compensation Discussion and Analysis and presents his conclusions and recommendations to the Compensation Committee. The Compensation Committee considers the Chief Executive Officer’s recommendations, but ultimately Process for Determination of our Executive Compensation: Step-By-Step
EXECUTIVE COMPENSATION
For Messrs. Wren and Angelastro, our principal components of pay are a base salary and an Incentive Award based on For Messrs. Nelson and O’Brien, our principal components of pay are a base salary and an Incentive Award based on Ms. Tarlowe did not participate in the Incentive Award Plan due to the fact that she joined Omnicom Although Each of these components and the manner in which decisions for
The objective of base salary is to provide a portion of compensation to the NEO that is not “at risk” like incentive bonuses or equity awards, and is generally unaffected by fluctuations in company performance or the market in general. The base salaries for the NEOs are determined by the Compensation Committee. Adjustments in base salary for NEOs are
EXECUTIVE COMPENSATION has not had an increase in base salary in 10 years and his base salary has not increased further since his appointment.
Omnicom considers a number of factors when determining whether to make base salary adjustments, which factors may include advice from our compensation consultant, the general knowledge of our Chief Executive Officer and Compensation Committee of base salaries paid to similarly positioned executives, salaries paid historically, tax and accounting changes that may affect the Company, as well as personal performance as assessed by the Compensation Committee and the Chief Executive Officer. No formulaic base salary adjustments are provided to the NEOs. Based on our Chief Executive Officer and the Compensation Committee’s general knowledge of base salaries paid to similarly positioned executives at companies of comparable size and profitability, and the Compensation Committee’s emphasis on performance-based compensation, no NEO’s base salary was adjusted in Performance-Based Compensation Awards As discussed above, under the Incentive Award Plan, eligible executive officers may The following table summarizes the combination of quantitative performance measures the Compensation Committee considered for the Incentive Awards awarded in fiscal year Determination of Incentive Award: (Short-term Cash Portion and Long-term Equity Portion)
We believe our goals are meaningful and challenging, the achievement of which is designed to drive shareholder value. EXECUTIVE COMPENSATION
PERFORMANCE METRIC (FINANCIAL PERFORMANCE VS. ANNUAL COMPANY TARGET) – 50% OF TARGET INCENTIVE AWARD
The “Performance Metric” is based on Omnicom’s financial performance as compared to annual Company targets. The Compensation Committee considered the following performance measures for fiscal year
Performance Metric Organic growth is total revenue growth less the change in revenue attributable to changes in foreign exchange rates and the revenue from businesses acquired net of the revenue from businesses that were disposed. A predetermined multiplier of between 0.0 and 2.0 (the “Performance Multiplier”) was ascribed based on the range of Omnicom performance with respect to each performance measure as shown above. The Performance Multiplier is applied to each metric’s weighting within the category based on the results achieved to arrive at a weighted score (the “Performance Weighted Score”). EXECUTIVE COMPENSATION PEER METRIC (FINANCIAL PERFORMANCE VS. INDUSTRY PEER GROUP) – 50% OF TARGET INCENTIVE AWARD
The “Peer Metric” is based on Omnicom’s financial performance as compared to an industry peer group. The Compensation Committee considered the following performance measures for fiscal year
A predetermined multiplier of between 0.4 and 2.0 (the “Peer Multiplier”) was ascribed based on Omnicom’s ranking relative to the Peer Metric Group for each metric. The Peer Multiplier was applied to each metric’s weighting within the category based on the results achieved to arrive at a weighted score (the “Peer Weighted Score”).
For performance in fiscal year EXECUTIVE COMPENSATION
CALCULATION OF METRICS RESULTS – COMPANY TARGETS The tables below describe earned Incentive Awards based on
CALCULATION OF METRICS RESULTS – COMPANY PERFORMANCE VS. INDUSTRY PEER GROUP
EXECUTIVE COMPENSATION Fiscal Year
QUALITATIVE FACTORS The Compensation Committee, with the assistance of Omnicom’s Chairman and Chief Executive Officer, looked to determine how each eligible NEO contributed to advancing the core “pillars” that serve as the foundation of our business strategy: providing best in class services to clients, maximizing efficiencies and minimizing risk through enterprise-wide initiatives and achieving the highest levels of corporate values and integrity.
EXECUTIVE COMPENSATION Adjustments: Qualitative Factors The Compensation Committee, with the assistance of Omnicom’s Chairman and Chief Executive Officer for NEOs other than himself, considered the following contributions of each eligible NEO toward advancing our business strategy in determining whether to adjust the calculated Incentive Awards. John D. Wren.Under Mr. Wren’s leadership, Omnicom has grown into one of the world’s largest and most respected advertising and marketing communications firms. As part of the original management team that created Omnicom in 1986 and as the Company’s chief executive officer since 1997, he has been the architect of a complex strategy that has positioned Omnicom to serve the global marketing requirements of the world’s most sophisticated marketers. He has championed the creation of unique virtual client networks across Omnicom agencies, geographies and disciplines to meet the needs of global clients. He was early to envision the potential of digital technologies, leading the Company’s early investment in and development of digital technologies and capabilities across each of Omnicom’s agencies and he continues to drive our strategy to leverage our digital and analytical capabilities and utilize new mediums and technology platforms. He has also been instrumental in leading the Company’s efforts to extend and deepen Omnicom’s capabilities in rapidly growing markets and new service areas to meet the needs of clients’ global marketing efforts. Throughout this evolution of the Company, Mr. Wren has ensured that Omnicom agencies and networks have continued to build on their strong legacy of creative excellence. Today, Omnicom’s networks and agencies are regarded as the industry’s most creative, as measured by their share of global awards for creative excellence. Mr. Wren is responsible for the organizational changes and strategic investments Omnicom has been implementing over the past few years. As a result of his insight into the changing needs of our clients and to better capture the expanded scope of our services, Mr. Wren developed and executed the creation of our practice areas to bring together agencies operating in common disciplines to create additional custom client solutions. We now have Practice Areas established for Healthcare, Public Relations, Precision Marketing and CRM, National Brand Advertising, Experiential, Specialty Marketing, Brand and Consulting, and our global advertising agency networks. He also led the efforts to simplify our service offerings through our key client matrix organization structure, our client-centric business model requiring multiple agencies within Omnicom to collaborate in formal and informal virtual client networks. The demands of clients, consumers and new technologies are pushing agencies to work faster. Our new organizational structure is designed to deliver more innovation, ideas and growth in a nimble and flexible fashion so we can adjust quickly as our clients’ needs change. Mr. Wren has also long been instrumental in identifying, attracting, retaining and developing highly skilled key executives and is deeply committed to disseminating best practices across Omnicom through industry-leading advanced education initiatives such as Omnicom University. The strategies designed and implemented by Mr. Wren not only delivered solid financial results, Under Mr. Wren’s leadership in
Philip J. Angelastro.Mr. Angelastro provided key leadership and financial management for our Company. He managed the Company’s capital and liquidity, oversaw the management of risk and the strengthening of the Company’s balance sheet. He also supervised the enhancement of Omnicom’s financial planning and analysis process and helped to drive initiatives to leverage Omnicom’s scale in areas such as real estate, information technology, back-office services and procurement. Working with Mr. Wren and our senior network management teams, Mr. Angelastro continued to improve our working capital management programs, an important effort in maintaining Omnicom’s overall financial performance. Mr. Angelastro
EXECUTIVE COMPENSATION prioritized the development of the skills of our finance and operating personnel and implemented programs for their ongoing professional development. He oversaw the Company’s efforts in the areas of corporate ethics, enterprise risk management and global corporate social responsibility. In addition, during Jonathan Nelson.As CEO of Omnicom Digital, Mr. Nelson oversees Omnicom’s digital strategy, one of our fastest growing capabilities. A veteran of Omnicom since 2002, last year Mr. Nelson continued to spearhead the integration of digital capabilities across Omnicom’s portfolio companies. He also successfully led the continued global development of our data, analytics and content management platforms, digital services, technical and data partnerships, and search and programmatic media capabilities. Mr. Nelson also takes a leading role in the recruitment of talent for our digital services and in mergers and acquisitions in the digital landscape. Mr. Nelson is widely recognized as an industry thought leader, appearing in print in The New York Times, USA Today, Forbes, Newsweek, and Ad Week and on television on CNN, CNBC, and MSNBC. Michael J. O’Brien.Mr. O’Brien successfully led the Company’s worldwide legal team, managed legal services provided to the Company, and monitored the Company’s compliance with all applicable laws, rules and regulations around the world. He played a lead role in setting priorities and agendas for the Company’s Board of Directors and its committees, providing them with advice on corporate governance developments and best practices, as well as legal risks and Adjustments to Calculated Incentive Awards While the Compensation Committee recognizes the contribution of each eligible NEO,
While the cash portion of the Incentive Awards have historically been paid to eligible NEOs in April of each year, in light of the COVID-19 pandemic, on the recommendation of our CEO, the Compensation Committee has agreed that the cash portion of the Incentive Awards for 2019 will be paid at a later date during 2020. EXECUTIVE COMPENSATION
The Incentive Award earned by each eligible NEO, is payable at the election of the Compensation Committee in cash and/or equity-based awards. It is Omnicom’s philosophy that its NEOs should be rewarded based upon Omnicom’s financial performance as well as each executive’s contribution to advancing Omnicom’s business strategy and our long-term performance. The Committee believes that grants of equity awards serve to align the interests of the shareholders with those of the NEOs by incentivizing the NEOs toward the creation and preservation of long-term shareholder value. In addition, our equity award agreements contain restrictive covenants that are intended to protect our business in the event of an executive’s departure. As shown above, a portion of Messrs. Wren and Angelastro’s Incentive Award
While initial performance metrics determined the number of PRSUs granted to Messrs. Wren and Angelastro, there is yet another performance test performed three years later with respect to the same award that establishes the percentage of the award that the executive will ultimately realize. This subsequent test compares the Company’s return on equity for a three-year period The maximum number of PRSUs that each NEO is eligible to receive under this award is equal to the dollar value of the portion of the
EXECUTIVE COMPENSATION PRSUs are designed to reward individual contributions to the Company’s performance as well as motivate future contributions and decisions aimed at increasing shareholder value over time. In
Metrics for
In the event Mr. Wren or Mr. Angelastro terminates employment on or prior to December 31, Messrs. Wren and Angelastro are required to retain a certain amount of Company’s equity/stock as described in “Executive Compensation Related Practices, Policies and Guidelines – Executive Stock Ownership Guidelines.”
The Compensation Committee paid a portion of the Incentive Award for performance in The Compensation Committee believes that service-based vesting of the RSUs is an important motivator to reward continued performance. One-fifth of each award of RSUs
EXECUTIVE COMPENSATION
SERCR Plan and Executive Salary Continuation Plan Agreements.Omnicom has entered into Award Agreements with Messrs. Wren and Angelastro pursuant to the Senior Executive Restrictive Covenant and Retention Plan, which was adopted in December 2006 (the “SERCR Plan”) and an Executive Salary Continuation Plan Participation in the SERCR Plan was determined to be offered by the Compensation Committee based on the value of the benefit provided to Omnicom through the restrictive covenants contained in the SERCR Plan, as a retention mechanism to seek to secure the services of the participants by providing post-employment benefits, subject to a minimum period of employment and based on the Compensation Committee’s analysis of the future financial impact of various termination payout scenarios on each of these recipients and on Omnicom. In making the decision to extend these benefits, the Compensation Committee relied on the advice of its independent compensation consultant, Amounts payable to Deferred Restricted Stock and Restricted Stock Unit Plans.Each of our NEOs was previously eligible to defer, at his or her election, some or all of the shares of restricted stock and restricted stock units that otherwise would have vested in a given year. No NEO made such an election in Retirement Savings Plan.Omnicom sponsors the Omnicom Group Retirement Savings Plan, which is a tax-qualified defined contribution plan. All employees who meet the Plan’s eligibility requirements may elect to participate in the 401(k) feature of the Plan and may also receive a discretionary company profit sharing contribution after the end of the Plan year based on the Plan’s provisions. Insurance.In Other perquisites.We procure aircraft usage from an unrelated third-party vendor. In some instances, Omnicom makes available to the NEOs personal use of corporate aircraft hours. The dollar amount reported in the Summary Compensation Table for personal use of aircraft hours reflects the aggregate incremental cost to Omnicom, based on payments we make which are equal to the vendor’s hourly charge for such use and landing fees, minus the amount Omnicom is reimbursed by the executive for his or her use on the aircraft. Each executive reimburses Omnicom for at least the amount calculated based on the Standard Industry Fare Level (SIFL) tables prescribed under IRS regulations promptly after the cost of the flight is incurred. Additional perquisites and benefits are set forth in the notes to the Summary Compensation Table for
EXECUTIVE COMPENSATION
Role of the Independent Compensation Consultant.Because of the competitive nature of our business, the loss of key executives to competitors is a significant risk and Omnicom’s paramount concern is to attract and retain the highest-caliber executive team to ensure that Omnicom is managed in the most effective possible manner. The Compensation Committee directly retains the services of FW Cook, Market-Competitive Compensation.The Compensation Committee periodically consults with FW Cook
Accounting and Tax Considerations IRC SECTION 162(m) Prior to the passage of the Tax Act, Section 162(m) of the Internal Revenue Code (the “Code”) generally limited to $1 million the U.S. federal income tax deductibility of compensation paid in one year to a corporation’s Chief Executive Officer and certain other executive officers. Compensation that qualified as “performance-based” under Section 162(m) of the Code was exempt from this $1 million limitation. As part of the Tax Act, the ability to rely on this “qualified performance-based compensation” exception was eliminated, and the limitation on deductibility was generally expanded to include all NEOs. Although the Compensation Committee historically structured our compensation arrangements in a manner intended to qualify for this exception, subject to certain transition relief rules, we may no longer take a deduction for any compensation paid to our covered employees in excess of $1 million. The Compensation Committee believes that the tax deduction is only one of several relevant considerations in setting compensation and shareholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in structuring compensation programs, even though such programs may result in non-deductible compensation expenses. Accordingly, the Compensation Committee has approved compensation amounts for our executive officers that were not fully deductible because of Section 162(m) of the Code and, in light of the repeal of the performance-based compensation exception to Section 162(m), expects in the future to approve compensation that is not deductible for federal income tax purposes in order to achieve the desired flexibility in the design and delivery of compensation. EXECUTIVE COMPENSATION ACCOUNTING FOR SHARE-BASED COMPENSATION Omnicom accounts for share-based compensation including its RSUs in accordance with Risk Assessment in Compensation Programs We have assessed the Company’s compensation programs and have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. FW Cook Based on the foregoing and the fact that, since FW Cook Policies The following table briefly summarizes the policies and guidelines Omnicom has adopted over the years to strengthen our pay practices, each of which is discussed in detail below:
EXECUTIVE COMPENSATION Executive Stock Ownership Guidelines.We have adopted Executive Stock Ownership Guidelines that require our Chairman and Chief Executive Officer and Chief Financial Officer to hold shares of Omnicom common stock with a value equal to the specified multiples of base salary indicated below. These guidelines ensure that they build and maintain a long-term ownership stake in Omnicom’s stock that will align their financial interests with the interests of the Company’s shareholders. The applicable guidelines for Messrs. Wren and Angelastro are as follows:
The guidelines were adopted in the first quarter of 2010 and the executives have five years from the date of the adoption of the guidelines or from the date of their appointment to attain the ownership levels. For purposes of the guidelines, the value of an executive’s stock ownership includes all shares of the Company’s common stock owned by the executive outright (inclusive of unvested equity awards such as restricted shares or units and PRSUs) or held in trust for the executive and his or her immediate family, plus the executive’s vested deferred stock and allocated shares of the Company’s common stock in employee plans. As of December 31, Compensation Forfeiture/Clawback Policy.Our Board has adopted an Executive Compensation Clawback Policy covering compensation paid with respect to any period beginning on or after January 1, 2010, to certain of our officers, including our NEOs. Under this policy, in the event a material restatement of our financial statements is caused by a fraudulent or intentionally illegal act of one of our officers, the non-management members of the Clawback Committee will review the annual performance-based cash bonus paid and any performance-based equity awards granted to such officer with respect to the period covered by the restatement. If the Clawback Committee determines that the amount of such awards would have been lower had they been determined based on such restated financial statements, it may seek to recover the after-tax portion of the difference, including, with respect to equity awards, any gain realized on the sale of any such shares. Equity Compensation Policy.Omnicom has adopted a policy regarding grants of equity awards, which provides, among other things, that grants of equity awards to non-employee members of the Board shall be approved by the full Board and any other grants must be approved by the Compensation Committee. With limited exception, the grant date of any equity award will be the date of the Board or Committee meeting at which the award is approved and the exercise price, if applicable, will be no less than the closing price of Omnicom’s common stock on such date. Policy Regarding Death Benefits.On February 10, 2011, Omnicom’s Board of Directors adopted a policy regarding death benefits, which provides, among other things, that shareholder approval is required for any future compensation arrangements that would require the Company to make payments, grants or awards following the death of a NEO in the form of unearned salary or bonuses, accelerated vesting or the continuation in force of unvested equity grants, awards of ungranted equity or perquisites. The policy would not apply to payments, grants or awards of the sort offered to other Company employees and does not apply to arrangements existing at the time the policy was adopted. Policy Statement Regarding Hedging.In February 2013, Omnicom’s Board of Directors adopted a policy statement regarding hedging, which provides that no director, NEO or network chief executive officer may purchase any security whose value derives from an Omnicom equity security (including any prepaid variable forward contracts, equity swaps, collars or direct or indirect interests in any exchange fund with 10% or greater exposure to Omnicom) or any similar financial instrument that is designed to hedge or offset any decrease in the market value of Omnicom equity securities. Policy Statement Regarding Pledging and Margin Transactions.In October, 2019, Omnicom’s Board of Directors adopted a policy statement regarding pledging and margin transactions. The policy provides that no director or executive officer may purchase an Omnicom equity security on margin or hold Omnicom equity securities in a margin account. In addition, the policy prohibits directors and executive officers from borrowing against any account in which Omnicom equity securities are held, or pledging Omnicom equity securities as collateral for a margin loan or any other loan. The policy does not prohibit the cashless exercise of stock options under our 2013 Plan. Any transaction that may violate this policy must be pre-cleared with Omnicom’s General Counsel. EXECUTIVE COMPENSATION Summary Compensation Table for
While the cash portion of the Incentive Awards have historically been paid to eligible NEOs in April of each year, in light of the COVID-19 pandemic, on the recommendation of our CEO, the Compensation Committee has agreed that the cash portion of the Incentive Awards for 2019 will be paid at a later date during 2020.
EXECUTIVE COMPENSATION
Grants of Plan-Based Awards in The below table provides information about equity and non-equity awards granted to the NEOs with respect to
EXECUTIVE COMPENSATION Outstanding Equity Awards at The following table provides information on the holdings of stock options and unvested stock awards by the NEOs as of December 31,
EXECUTIVE COMPENSATION Option Exercises and Stock Vested in The following table provides information for the NEOs on (a) stock option exercises during
Nonqualified Deferred Compensation in Certain of Omnicom’s employees were, in prior years, eligible to defer some or all of the shares of their restricted stock and RSUs that may vest in a given year. For additional information about the deferral plans pursuant to which these elections were made, see the description of deferred compensation in the section entitled “Compensation Discussion and Analysis” on page The table below provides information on the non-qualified deferred compensation of the NEOs in
Potential Payments upon Termination of Employment or Change in Control The NEOs may be entitled to payments upon termination of employment or in connection with a change in control of Omnicom. The table below sets forth the potential payments that each NEO may receive upon termination of employment or change in control of Omnicom under various scenarios as of December 31,
EXECUTIVE COMPENSATION
Omnicom adopted the SERCR Plan in 2006, and Messrs. Wren and Angelastro participate. The SERCR Plan is unique in its structure and objectives. It is intended to provide security to Omnicom through the restrictive covenants described below while delivering a valuable benefit to executives in the form of post-termination compensation. Restrictive Covenants In consideration for annual benefits under the SERCR Plan, participating executives are subject to restrictions on competition, solicitation, disparagement, and other willful actions that may materially harm Omnicom, from the date of termination of employment through the end of the calendar year in which they receive their last annual benefits payment.
Annual Benefits The SERCR Plan provides annual benefits to participating executives upon their termination of employment after they render seven years of service to Omnicom or its subsidiaries, unless termination is for “Cause.” “Cause” is generally defined for this purpose as the executive having been convicted of (or having entered a plea bargain or settlement admitting guilt for) any felony committed in the execution of and while performing his duties as an executive officer, an act of fraud or embezzlement against Omnicom, as a result of which continued employment would have a material adverse impact on Omnicom, or having been the subject of any order, judicial or administrative, obtained or issued by the SEC, for any securities violation involving a material and willful act of fraud. Subject to compliance with the SERCR Plan’s restrictive covenants, the annual benefit is payable for 15 years following termination, and is equal to the lesser of (a) the product of (i) the average of the executive’s three highest years of total pay (base salary plus bonus and other incentive compensation), and (ii) a percentage equal to 5% plus 2% for every year of the executive’s service as an executive officer to Omnicom, not to exceed 35% and (b) $1.5 million, subject to an annual cost-of-living adjustment of up to 2.5% per year beginning with the second annual payment. Payment of this annual benefit begins
Omnicom has entered into an Executive Salary Continuation Plan Consulting Obligation and Certain Restrictive Covenants
Annual Benefits Following termination and subject to compliance with the consulting obligation and restrictions on competition, solicitation, disparagement, and other willful actions that may be harmful to Omnicom,
EXECUTIVE COMPENSATION Mr. Nelson is entitled to 100% of the annual payment amount in the event of disability. For a voluntary termination, including retirement, or a termination by Omnicom without Cause, Mr.
Each of the NEOs, other than Ms. Tarlowe, participated in our Incentive Award Plan in fiscal year
Omnicom provides life insurance coverage to its employees. Certain of the NEOs participate in a company-sponsored executive life insurance program that provides them with a higher coverage amount than they would otherwise be eligible for as employees. This coverage is in lieu of the coverage provided to employees generally. Specifically, Messrs. Wren and O’Brien are provided with executive life insurance policies for which Omnicom pays the premiums. As of December 31,
Messrs. Wren and Angelastro hold unvested PRSUs. Messrs. Nelson and O’Brien, and Ms. Tarlowe hold unvested RSUs that generally vest based on continued employment and the passage of time. As specified below, such NEOs are entitled to accelerated vesting (a) on a pro rata basis upon termination of employment due to disability, and (b) upon death. No equity awards held by our NEOs have single trigger or double trigger acceleration in connection with a change in control. However, if RSUs and PRSUs held by our NEOs or other employees are not assumed or substituted by an acquirer in connection with a change in control of Omnicom, they fully vest. If a NEO retires, voluntarily terminates or is terminated by Omnicom, with or without cause, all RSUs and PRSUs that have not yet vested are generally forfeited or, to the extent PRSUs are partially vested based on the passage of time, they may remain subject to vesting based on the ultimate achievement of the performance goals. EXECUTIVE COMPENSATION
The following table provides the potential payments that each NEO may receive upon termination of employment or change in control of Omnicom, assuming that (a) such termination or change in control of Omnicom occurred on December 31,
EXECUTIVE COMPENSATION As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information regarding the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner intended to be consistent with Item 402(u) of Regulation S-K. We identified the median employee by considering all individuals who were employed by us on October 31, We identified the median employee by examining all gross base salaries during the month of October After identifying the median employee for For For ____________________ The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. In accordance with the Audit Committee’s charter, the Audit Committee has appointed KPMG LLP as our independent auditors for our fiscal year ending December 31, Representatives of KPMG LLP are expected to be present at the The Audit Committee is not bound by the results of the vote regarding ratification of the independent auditors. If our shareholders do not ratify the selection, the Audit Committee will reconsider whether to retain KPMG LLP, but still may retain them. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Omnicom and its shareholders.
Approval of this item requires the favorable vote of the holders of a majority of the shares voting on the item. Abstentions and broker non-votes will have no effect on the outcome of this item. Fees Paid to Independent Auditors The following table shows information about fees billed by KPMG LLP and affiliates for professional services, as well as all “out-of-pocket” costs incurred in connection with these services, rendered for the last two fiscal years:
ITEM 3 In deciding to reappoint KPMG LLP to be our independent auditors for The Audit Committee has adopted a policy that requires it to pre-approve each audit and permissible non-audit service rendered by KPMG LLP except for items exempt from pre-approval requirements by applicable law. On a quarterly basis, the Audit Committee reviews and generally pre-approves specific types of services and the range of fees that may be provided by KPMG LLP without first obtaining specific pre-approval from the Audit Committee. The policy requires the specific pre-approval of all other permitted services and all other permitted services were pre-approved in The Audit Committee’s primary purpose is to assist the Board in carrying out its oversight responsibilities relating to Omnicom’s financial reporting. Management is responsible for the preparation, presentation and integrity of Omnicom’s financial statements, accounting and financial reporting principles and the establishment and effectiveness of internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for performing an independent audit of the financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), expressing an opinion as to the conformity of such financial statements with generally accepted accounting principles in the United States and auditing the operating effectiveness of internal control over financial reporting. The independent auditors have free access to the Audit Committee to discuss any matters they deem appropriate. In performing its oversight role, the Audit Committee has reviewed and discussed with management Omnicom’s audited Based on the review and discussions referred to in this Report, the Audit Committee recommended to the Board that the audited financial statements of Omnicom for the year ended December 31, Members of the Audit Committee ITEM 4 ____________________ John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has advised that he is the beneficial owner of no less than 100 shares of Omnicom common stock and that he intends to introduce a proposal for the consideration of shareholders at the Proposal 4 — Shareholders request that our Under this proposal it is likely that the Shareholders should be able to select the ownership structure of a group requesting proxy access. Shareholders are in the best position to know whether it will be
Omnicom executive pay was rejected by 9% of
Please vote yes: ITEM 4
The
Prior to adopting proxy access, the Company engaged in extensive The provision allowing up to 20 shareholders to act as a group to nominate a director under our proxy access framework aligns with the input provided by most of The current proxy access framework already provides a large number of our shareholders with the right to utilize proxy access.
Increasing the
The Board As a necessary part of the proxy access process, the Company is required to collect and verify information submitted by each nominating group member. This process diverts Company time and resources away from primary business functions. The Board therefore elected to set a reasonable limit on the size of a shareholder nominating group to alleviate any potentially unreasonable resource constraint introduced by this process. The current proposal would expose the Company to a potentially unreasonable administrative burden that Allowing up to Allowing groups of up to 20 shareholders to aggregate their stock ownership in order to satisfy the minimum ownership threshold is consistent with the approach taken by more than 90 percent of companies that have adopted proxy access since January 2015. This overwhelming consensus reflects the belief that capping nominating groups at 20 shareholders strikes the appropriate Given the
Approval of this proposal requires the favorable vote of the holders of a majority of the shares voting on the
____________________ Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information as of the close of business on April 1, ■each person known by Omnicom to own beneficially more than 5% of our outstanding common stock; ■each current director or nominee; ■each NEO; and ■all directors and executive officers as a group. The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Unless otherwise indicated, the address for each individual listed below is c/o Omnicom Group Inc., 437 Madison Avenue, New York, New York 10022.
STOCK OWNERSHIP INFORMATION
Our principal equity plan for employees is our 2013 Plan, which was approved by shareholders at our 2013 Annual Meeting of Shareholders and replaced all of our prior equity incentive plans. The Compensation Committee’s independent compensation consultant, FW Cook, The purpose of the 2013 Plan is to promote the success and enhance the value of Omnicom by continuing to link the personal interest of participants to those of Omnicom shareholders and by providing participants with an incentive for outstanding performance to generate superior returns to Omnicom shareholders. The 2013 Plan provides for the grant of stock options (both incentive stock options and nonqualified stock options), restricted stock, stock appreciation rights, performance shares, performance stock units, dividend equivalents, stock payments, deferred stock, and restricted stock units. Persons eligible to participate in the 2013 Plan include all employees and consultants of Omnicom and its subsidiaries, members of our Board or, as applicable, members of the board of directors of a subsidiary, as determined by the committee administering the 2013 Plan (the “IAP Committee”). The IAP Committee is appointed by our Board, and currently is comprised of the members of our Compensation Committee. With respect to awards to independent directors, Omnicom’s Board administers the 2013 Plan.
STOCK OWNERSHIP INFORMATION All of our current equity compensation plans have been approved by shareholders. The following table provides information about our current equity compensation plans as of December 31,
____________________
This year, the Annual Meeting will be a “hybrid” meeting, meaning that shareholders may attend online via a live audio webcast at www.virtualshareholdermeeting.com/OMC2020, or in person in Greenwich, Connecticut. In light of guidance from the U.S. Centers for Disease Control and Prevention and our continued commitment to the safety of our employees and shareholders, we encourage shareholders to participate in the 2020 Annual Meeting online. Record Date Shares Outstanding Holders of our common stock, par value $0.15 per share, as of the close of business on April Quorum; Required Vote; Effect of More than 50% of the shares entitled to vote will constitute a quorum for the transaction of business at the In order to obtain approval of the election of any nominee as a director when the number of nominees equals the number of directors to be elected, assuming a quorum exists, a director nominee must receive a majority of the votes cast with respect to such nominee, meaning the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee. Abstentions and broker non-votes will not be considered as votes cast and will have no effect on the election of directors. In order to approve, on an advisory basis, the resolution on the Company’s executive compensation, ratify the appointment of KPMG LLP as our independent auditors, and approve the shareholder proposal described in the Proxy Statement, assuming a quorum exists, the affirmative vote of the holders of a majority of the shares represented at the meeting and actually voting on the item is required. Abstentions and broker non-votes will not be considered as voting on the items, and thus will have no effect on the outcome of Items 2, 3 and 4.
INFORMATION ABOUT VOTING AND THE MEETING
If you are the beneficial owner of shares held in “street name” by a broker, bank or other nominee, the broker, bank or other nominee, as the record holder of the shares, is required to vote those shares according to your instructions. Your broker, bank or other nominee should have sent you a voting instruction card for you to use in directing it on how to vote your shares. Under existing rules, if your broker holds your shares in its name and you have not given voting instructions, your broker nonetheless has the discretion to authorize the designated proxies to act, except on certain matters. As such, they could vote in respect of the ratification of the appointment of KPMG LLP as our independent auditors, but not on the election of directors, the advisory resolution to approve executive compensation or the shareholder proposal. Fidelity Management Trust Company, as trustee under our retirement savings plan, and Computershare Trust Company, Inc., as administrator of our ESPP, will vote common stock held in the plans as indicated by participants in whose accounts the shares are held, whether or not vested, on their proxies. Please note that your shares held in either plan will be voted as you instruct if your proxy card, telephone or Internet voting instructions are received on or before 11:59 p.m. Eastern Daylight Time on Thursday, June 4, 2020. In accordance with the terms of the retirement savings plan, Fidelity Management Trust Company will vote all shares for which it does not receive voting instructions by the deadline provided above in the same proportion on each issue as it votes the shares for which it does receive instructions. In accordance with the terms of the ESPP, Computershare Trust Company, Inc. will not vote shares for which it does not receive voting instructions by the deadline provided above. You may also vote your shares by attending the 2020 Annual Meeting, online or in person. To attend in person you must bring a valid photo identification, such as a driver’s license or passport, for verification against our record date shareholder list. If you are the beneficial owner of shares held in “street name” by a broker, bank or other nominee and you plan to attend the 2020 Annual Meeting in person, you should bring a brokerage statement showing your ownership of the shares as of the record date or a letter from the broker, bank or other nominee confirming such ownership, and a valid photo identification. If you wish to vote your shares that are held by a broker, bank or other nominee in person at the meeting, you must obtain a proxy from your broker, bank or other nominee and bring such proxy to the meeting. To attend the 2020 Annual Meeting online visit www.virtualshareholdermeeting.com/OMC2020 and enter the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or proxy card. Shareholders of record that hold shares directly in their own name through our transfer agent, Equiniti Trust Company, as well as participants in our employee retirement savings plan and ESPP, must pre-register to attend the 2020 Annual Meeting online at www.proxypush.com/OMC prior to the deadline of Tuesday, June 2, 2020 at 5:00 p.m. Eastern Daylight Time. Upon completing your registration, you will receive further instructions via email that you must follow to attend the Annual Meeting. No advance registration is needed if you are the beneficial owner of shares held in street name. Once admitted to the 2020 Annual Meeting, you may vote shares held in your name as the shareholder of record and shares held in street name for which you are the beneficial owner during the meeting.
INFORMATION ABOUT VOTING AND THE MEETING If you submit a proxy, whether through the Internet, by telephone or by using the proxy card, but do not indicate any voting instructions, your shares will be voted “for” the election of all nominees for director, “for” the advisory resolution to approve the Company’s executive compensation, “for” the ratification of the appointment of KPMG LLP, and “against” the shareholder proposal. If any other business properly comes before If you submit your proxy, you may change your voting instructions at any time prior to the vote at the Equiniti Trust Company will act as inspectors at the ____________________ We are making and will bear all costs of this proxy solicitation. Proxies may be solicited by mail, in person, by telephone or by facsimile or electronic transmission by our officers, directors, and regular employees. We may reimburse brokerage firms, banks, custodians, nominees and fiduciaries for their expenses to forward proxy materials to beneficial owners. We have retained To the extent that this Proxy Statement is incorporated by reference into any other filing by Omnicom under the Securities Act of 1933 or the Exchange Act, the sections of this Proxy Statement entitled “Compensation Committee Report” and “Audit Committee Report” (to the extent permitted by the rules of the SEC) will not be deemed incorporated, unless specifically provided otherwise in such filing. Availability of Certain Documents In accordance with the rules promulgated by the SEC, we have elected to provide access to our proxy materials on the Internet. This Proxy Statement and our Delivery of Documents to Shareholders Sharing an Address If you are the beneficial owner of shares of our common stock held in “street name” by a broker, bank or other nominee, your broker, bank or other nominee may only deliver one copy of this Proxy Statement and our ADDITIONAL INFORMATION Shareholder Proposals and Director Nominations for the Any shareholder who wishes to present a proposal for inclusion in next year’s proxy statement and form of proxy under Rule 14a-8 must deliver the proposal to our principal executive offices no later than the close of business on December For proposals or director nominations submitted outside the process of Rule 14a-8, our By-laws require that written notice of the proposal or nomination be provided to our Corporate Secretary no less than 60 days prior to the date set for the In addition, our By-laws provide a proxy access right permitting certain of our shareholders who have beneficially owned 3% or more of our outstanding common stock continuously for at least three years to submit nominations via the Company’s proxy materials for up to 20% of the directors then serving, but not less than two. Notice of proxy access director nominations for the A copy of the applicable By-law provisions may be obtained, without charge, upon written request addressed to: Omnicom Group Inc., 437 Madison Avenue, New York, New York 10022, Attn: Corporate Secretary. As the rules of the SEC and our By-laws make clear, submitting a proposal or nomination does not guarantee its inclusion. Michael J. O’Brien New York, New York ____________________ Non-GAAP Financial Information We present financial measures determined in accordance with generally accepted accounting principles in the United States (“GAAP”) and adjustments to the GAAP presentation (“Non-GAAP”), which we believe are useful measures to evaluate the performance of our businesses. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies. We define free cash flow (a Non-GAAP liquidity measure) as net income plus depreciation, amortization, share based compensation expense and plus/(less) other items to reconcile to net cash provided by operating activities. We believe free cash flow is a useful measure of liquidity to evaluate our ability to generate excess cash from our operations. Our method of calculating free cash flow may differ from methods used by other companies and, accordingly, may not be comparable to such other companies’ measures. See the reconciliation of free cash flow to net income, the most directly comparable GAAP measure, below. Reconciliation of Free Cash Flow to Net Income
We define after tax reported operating profit (a Non-GAAP financial measure) as reported operating profit less income taxes calculated using the effective tax rate for the applicable period. We believe after tax reported operating profit is a useful measure of after tax operating performance as it excludes the after tax effects of financing and investing activities on results of operations. Our method of calculating after tax reported operating profit may differ from methods used by other companies and, accordingly, may not be comparable to such other companies’ measures. See the reconciliation of after tax reported operating profit to reported operating profit, the most directly comparable GAAP measure, below. ANNEX A Reconciliation of After Tax Reported Operating Profit to Reported Operating Profit
We use EBITA and EBITA Margin as additional operating performance measures that exclude the non-cash amortization expense of intangible assets, which primarily consists of amortization of intangible assets arising from acquisitions. We define EBITA as earnings before interest, taxes and amortization of intangible assets, and EBITA Margin as EBITA divided by revenue, both of which are Non-GAAP financial measures. We believe that EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our businesses. The following table reconciles EBITA and EBITA Margin to the most directly comparable GAAP financial measure, Net Income Reconciliation of EBITA to Net Income
ANNEX A When calculating our
Calculation of Net Income used for Diluted EPS Growth
The Board of DirectorsUNANIMOUSLY Recommends a VoteFORall Nominees in Item 1.
The Board of DirectorsUNANIMOUSLY Recommends a VoteFOR Items 2 and 3.
The Board of DirectorsUNANIMOUSLY Recommends a VoteAGAINST Item 4.
ANNUAL MEETING OF SHAREHOLDERS
Shareholders may also attend online at For your reference, the Proxy Statement to solicit proxies for our
The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted “FOR” all nominees in Item 1, “FOR” Items 2 and 3, and “AGAINST” Item 4, and in the discretion of the proxies upon such other matters as may properly come before the Annual Meeting. By signing the proxy, you revoke all prior proxies and appoint Philip J. Angelastro and Michael J. O’Brien, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and postponements or adjournments. If the undersigned is a participant in our employee retirement savings plan and/or our employee stock purchase plan and has Omnicom stock allocated to his or her account(s), then the undersigned directs the trustee or the administrator of the relevant plan likewise to appoint the above-named individuals as proxies to vote and act with respect to all shares of such stock so allocated in the manner specified on the reverse of this card and in their discretion on all matters as may properly come before the meeting. If you are such a participant and your voting instructions are not received by 11:59 p.m. Eastern Daylight Time, on Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote your shares
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your Proxy Card.
OMNICOM GROUP INC. Annual Meeting of Shareholders Tuesday, June 9, 2020 ICON International Shareholders may also attend online at Important Notice Regarding the Availability of Proxy Materials for the This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before the meeting. Notice is hereby given that the Annual Meeting of Shareholders of Omnicom Group Inc. (the “Company”) will be held at ICON International, One East Weaver Street, Greenwich, Connecticut 06831 on Tuesday, June 9, 2020 at 10:00 a.m. Eastern Daylight Time. Directions to the Annual Meeting where you may vote in person can be found on our website, http://investor.omnicomgroup.com. In light of public health considerations due to the COVID-19 pandemic, we have decided to hold a “hybrid” Annual Meeting. As such, shareholders will have the opportunity to attend the Annual Meeting online at www.virtualshareholdermeeting.com/OMC2020, along with the option to attend in person. In order to attend the Annual Meeting online, you must pre-register at www.proxypush.com/OMC prior to the deadline of Tuesday, June 2, 2020 at 5:00 p.m. Eastern Daylight Time. The Annual Report and Proxy Statement are available atwww.proxydocs.com/omc. If you want to receive a paper copy or an e-mail with links to the electronic materials, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side of this notice on or before May 26, 2020 to facilitate timely delivery. The Board of Directors has fixed the close of business on April 22, 2020 as the record date (the “Record Date”) for the determination of shareholders entitled to receive notice of and to vote at the Annual Meeting or any adjournment(s) thereof.
Your Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
To request paper copies of the proxy materials, which include the proxy card,
|